This is an enlightening thread and I’m very thankful you have been maintaining this comments section so diligently.

My question pertains to withdrawing from an ALT coin back to FIAT and the steps I need to take to get there, if I chose to buy an ALT coin, my usual steps would be 1.) fund an exchange, 2.) buy BTC, 3.) buy the alt coin. Then if I want to take profits and cash out to CAD$ I would 1.) sell to BTC, 2.) transfer to my local exchange, 3.) sell BTC to CAD$. 4.) transfer to my Bank.

The time frames for these transactions would be happening quickly, so in the purchasing process I’d acquire BTC and buy my alts, the price difference between when I bought BTC and traded to an ALT wouldn’t have changed much but I believe this would be a taxable event, so how much do I get taxed here ? Is the taxable gain / loss worked out on the fluctuation in price between the BTC and the ALT ? If so this would only be a small amount correct ?

The same concern surrounds cashing out, Say I buy 1k worth of BTC then immediately use that 1k of BTC to buy RIPPLE, then 1 year later the RIPPLE is worth 5k, so I sell the RIPPLE to BTC which would mean I pay gains of $2k ((50% of 4k profit) … then I want to transfer the BTC to my local exchange and Sell the BTC for CAD$ .. because the BTC to CAD transaction would happen on the same day there shouldn’t be much price fluctuation but there is a transaction there, so how much tax to I pay there ? I have already paid gains on the RIPPLE profits selling to BTC. Do I only calculate taxable gains / losses going from BTC to CAD for the values that fluctuated between the 2 currencies ? Or am I having to pay capital gains on the 4k RIPPLE profits again ?

Thanks, Ben.

Ryan,

You’re taxed based on the year which the taxable event happened. I suppose if you made a life changing amount in the first quarter of the year and then you immediately moved and cut all ties to Canada, you might be able to get your capital gains tax free. But I’m sure the CRA has accounted for that too.

Zan,

You’ll need some kind of documentation to log your capital gains and losses for taxes. If you don’t have anything, you may want to speak to an accountant for advice.

I have 2 questions :

1) What about my trades in QUADRIGA CX (It is closed now- I think owner passed away). ? and I do not have any records with me….

2) What about SHAPESHIFT records?

It is decentralized exchange which does not provide any records after the transaction is done.and I used it few times but have no records….

How to report those transactions on these 2 exchanges? I m feeling totally helpless- I had no idea to keep records when doing the transactions.

Please advise.

David,

Each time you trade or sell, it’s a taxable event so you’d need to calculate your capital gains/losses accordingly.

I’m not familiar with disability cheques, so I don’t know how that’s taxed.

What you pay overall in tax depends on your income bracket.

I receive a disability check here in BC.

I have been investing a fairly large portion of my check each month into Bitcoin…

When I go to sell it for Cold Hard Canadian Cash, how will this work?

also, since it came from my disability check will I have to repay back a large amount of what I have made to the government?

How much would I pay in taxes?

Thanks!

Robert,

If you haven’t sold or traded your crypto then it’s just a paper loss so there’s nothing to report.

Richard,

It’s not the same balance when you’ve traded it for something else.

E.g.

I hold mutual fund X, I then trade it for Y, which I then trade for Z. I then trade Z for 3 of Mutual fund X.

Each event is taxable as I’ve disposed of the asset, but just because I’m back to the original asset doesn’t mean it’s no longer taxable.