Umm, the answer to your question may depend on your jurisdiction, in any case:

Sold 10 BTC on Jan 1, 2013 at $100/BTC, you realized a capital gain of 10 x $100 = $1,000.

This capital gain needs to be declared in your income for the taxation year 2013.

However, Dec 31, 2013 you buy 100 BTC at $10/BTC = $1,000, so you lost $1,000. Depending on your jurisdiction you may deduct this against your capital gains for the year.

Therefore for the taxation year 2013 you made $1,000 by selling 10 BTC, and then lost $1,000 by buying 10 BTC.


If there was a positive spread (say you made money), you would need to declare that income as a capital gain, if there was a negative spread (you lost money), you SHOULD declare it as a capital loss even if you have nothing to set it against as capital losses (atleast in canada) can be carried back three years (not sure of the number, this is off the top of my head) and carried forward either 10/20 years or indefinitely (this is again off the top of my head) and so can be used to offset gains in consequent years.

It is actually quite complicated stuff in practice, I would advise you to get the help of a lawyer / accountant with knowledge of cryptos, if you are Canadian you can ask me and I will tell you when I have time.