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

[Scott Frederick]

I believe that CRA considers Bitcoin to be a commodity, not a currency, so
you would be subject to capital gains tax. The question now is, is that
gain taxable annually, or only when the gain is realised.

On 20 Oct 2017 6:32 AM, "Joel Nahrgang" <joelsn at gmail.com> wrote:

> > 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
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>> >
>>
>> - --
>> 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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