Any income from transactions involving cryptocurrency may need to be reported for tax purposes. Similar to trading stocks, any activity (i.e., buying and selling coins) that results in gains could be considered income.
Because coins can be bought and sold, the Canada Revenue Agency (CRA) generally treats cryptocurrency as a ‘good’ that can be exchanged. Transactions that result in a profit could be considered income or capital gain and would need to be reported on your income tax. If you’re wondering whether your transactions need to be reported, speak with a tax professional or read the CRA’s guide for cryptocurrency.
Wealthsimple doesn’t offer tax slips for cryptocurrency transactions, but we’ve put together some tips when it comes to tax time.
Calculating gains and losses
The first step it to convert your coins into Canadian dollars to calculate your gains and losses to include when filing your income tax.
In essence, you're trying to gauge the difference from the coin's original value to the value you sold it for. Over time you might continuously add coins or sell portions of your wallet. All of these factors need to be taken into consideration when calculating your gains and losses. To perform these calculations, you’ll need to view your monthly statement.
If you’re unsure how to calculate your gain and losses, the CRA shares a few examples using different transactions. If you’re still scratching your head, we suggest visiting your friendly neighbourhood tax professional.
Where do I find my monthly statements?
Monthly statements can be accessed from the "Accounts" screen within the app. While logged in, tap the icon in the top left corner of the screen, select "Accounts," and chose your Crypto account. Scroll down to the "Documents" section and select "Monthly statements."
A word of warning
This article is provided for informational purposes only. It does not cover every aspect of the topic it addresses. The content is not intended to be tax, investment advice, legal or any other kind of professional advice. Before taking any action based on this information you should consult a tax professional. This will ensure that your individual circumstances have been considered properly and that any action you take is based on the latest available information.