[kwlug-disc] Accepting bitcoin (and other cryptos) as a Canadian business

[Joel Nahrgang]

> Not a tax accountant by any means

I'm not a CPA, but worked in public accounting for over 20 years, including
tax.

Your thinking is on the right track but I wouldn't record it that way.

You make a sale for $100 CDN and charge $13 CDN for hst (13%). You would
owe cra $13 for HST if that is all you did in the filing period. Regardless
of what currency it is in, you just owe $13 CDN.

If you happen to get paid in bitcoin, using Bob's example and received 1
BTC, that is what would show on your balance sheet until the end of the
year/quarter/month when you need to adjust all currencies to reflect the
CDN$ value.

If those currencies are higher than the CDN$ equivalent, then the
difference is recorded as income and can be taxed on it, This would just go
into the overall income and your expenses would reduce the income.

On Thu, Oct 19, 2017 at 9:52 PM, Bob Jonkman <bjonkman at sobac.com> wrote:

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> Remi Gauvin wrote:
> > Not a tax accountant by any means
>
> Me neither.
>
> > If I traded $100 worth of my service for 1 BTC, then 2 months
> > later,
> traded that 1 BTC for $150 cash (or equivalent goods/service), my
> total taxable income would be $150
>
> This needs a tax accountant.  When I generate an invoice for services
> rendered I charge HST (13%) at the time of invoicing.  So if I perform
> a service for 1 BTC then I would charge 1 BTC + .13 BTC HST = 1.13
> BTC.  CRA gets whatever that .13 BTC is worth at the time the services
> are billed. The .13 BTC are not mine, and I can't spend it or invest it.
>
> If two months down the road my 1 BTC has increased in value 1.5x then
> that's a capital gains, just like any other investment. The .5 BTC
> would be taxed at whatever the capital gains is.
>
> - --Bob.
>
>
>
> On 2017-10-19 05:58 PM, Remi Gauvin wrote:
> > On 17-10-19 04:37 PM, Andrew Stevanus (KWLUG) wrote:
> >> The recent mention of the Humble Cryptocurrency Bundle and the
> >> ensuing discussion reminded me of something that I've been
> >> wondering about for a while. How would one go about accepting
> >> bitcoin and other cryptocurrencies as a Canadian business?
> >> Obviously, you'd still have to pay income tax, so would you
> >> calculate the equivalent amount in CAD when you received a
> >> payment and just use that? What exchange would you get the price
> >> from? Does it matter? Do you use the price when the invoice is
> >> generated, when the customer sends the payment, or when it is
> >> actually confirmed on the blockchain? Are there any additional
> >> rules that would apply when accepting cryptocurrency versus CAD?
> >>
> >
> > Not a tax accountant by any means, but if you'll allow to play one
> > for a bit.
> >
> > I don't really think it matters a great deal how you convert value
> > at the time you receive the coins, (so long as it's consistent and
> > reasonable.  Basically, it would be the same as barter.).  However,
> > that value would then further be converted to gain/loss when you
> > dispose of said coins.
> >
> > ie.  If I traded $100 worth of my service for 1 BTC, then 2 months
> > later, traded that 1 BTC for $150 cash (or equivalent
> > goods/service), my total taxable income would be $150.
> >
> >
> >
> >
> >
> > _______________________________________________ kwlug-disc mailing
> > list kwlug-disc at kwlug.org
> > http://kwlug.org/mailman/listinfo/kwlug-disc_kwlug.org
> >
>
> - --
> Bob Jonkman <bjonkman at sobac.com>          Phone: +1-519-635-9413
> SOBAC Microcomputer Services             http://sobac.com/sobac/
> Software   ---   Office & Business Automation   ---   Consulting
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