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

Fri Oct 20 13:41:40 EDT 2017

I'll ask my CPA about this at some point and report back whenever I do that.

On Fri, Oct 20, 2017 at 12:38 PM Bob Jonkman <bjonkman at sobac.com> wrote:

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> Chamunks wrote:
> > So @Bob you're saying it's better to just cash out the 13% out of
> > BTC and bank that for tax day?
>
> I don't know if it's "better", but it's certainly more straightforward.
>
> Until CRA starts accepting BTC as a payment method it needs to be
> handled as a foreign currency. And I'm not sure if BTC is recognized
> as a foreign currency, so then it may need to be dealt with as barter.
> IANAA, YMMV, ETC.
>
> Joel wrote:
> > Your thinking is on the right track but I wouldn't record it that
> > way.
>
> Thanx Joel! As you point out, there are different ways of recording
> the transaction, and different payment schedules to CRA. Retaining a
> tax accountant for a small business is a prudent move.
>
> - --Bob.
>
>
> On 2017-10-20 06:31 AM, Joel Nahrgang 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:
> >
> > 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
> >>>>
> >
> >>
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> >>
> >
> >
> >
> > _______________________________________________ kwlug-disc mailing
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> >
>
> - --
> Bob Jonkman <bjonkman at sobac.com>          Phone: +1-519-635-9413
> <(519)%20635-9413>
> SOBAC Microcomputer Services             http://sobac.com/sobac/
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