BTC taxable in Canada

Tax Time! BTC Meets Canada Revenue Agency

tax timeTax time in Canada! That time of year when people begin collecting pay stubs, receipts, loan statements, and various other reports to compile and learn how much they earned and how much they owe the government, or the government owes them. This year, I have a new item on my collection list of info to gather: my 2017 BTC earnings and expenditures!

Fortunately for me, my interest-bearing wallet over at lists the last 100 transactions under my stats button on the menu bar. These stats go all the way back to April 9th for me, which was the very first amount I sent over after discovering their new wallet status and the daily compounded interest payments! I copied my deposit stats to a spreadsheet and discovered I earned myself a whopping 0.006+ BTC last year! Considering I did it entirely with the use of Faucet Alley (a combination of faucets and a BTC site), and that’s pretty good for only investing time and effort. At today’s USD exchange value, that’s a total of $64.51. If exchanged into Canadian, I earned $81.96 at current rates. The only figure I don’t have at the moment, is how much of my total interest amount at Freebitco was earned on my 2017 deposits. Reviewing what the CRA has said regarding reporting expenditures spares me this calculation for this year. They only want the value of the BTC I spent at the time I spent it. This is easy for 2017 as I made just two purchases with a BTC pre-paid credit card to help cover a monthly subscription fee. I go to that site and it tells me the exact amount I spent in CAD.

For 2018 however, I will need to start keeping other receipts, such as those I spent in January proving that I could shop at a thrift store using a BTC-pre-paid physical debit/credit card. I kept one of those receipts, but the other was a grocery purchase and I almost NEVER keep those! So I think that amount will have to be estimated. Fortunately, the price of the item rarely changes. I will need to keep track of these things when I go to do my 2018 incometax.

I’m actually excited at the prospect of figuring all this out! To me, this is the logical culmination of the 2017 experiment, as I figure out how to be above board with my earnings, their interest and how I spent it.

Interestingly, the CRA official rules do not account for EARNING BTC as opposed to buying/investing Canadian funds into BTC. Capital gains tax applies in the latter scenario, but there seems to be an odd silence about the first at least from the position of someone who is not someone else’s employee. Clearly, the idea that someone can earn their way into possession of BTC according to CRA can only happen if a seller of goods and services accepts BTC as a form of payment, if they buy BTC on an exchange or via a BTC ATM, or if their employer paid them via BTC. Employers paying employees via BTC have to report the CAD equivalent in their payroll records at this time.

I have set up my website to allow for the payment of my services via BTC, but no time block purchases as of yet. When a seller accepts BTC as payment, the CRA says this falls into the barter set of income-reporting rules. This is handy information once clients do start payment for my services via BTC.

Incidentally, accounting programs such as Quickbooks now have a BTC module to assist a business in keeping track of this form of payment for their storefronts. Plugins for WordPress and online e-commerce sites exists from the likes of Bitpay and GoURL to allow online businesses to accept BTC, that’s actually how I am able to accept it at FCS. Companies such as Bitpay and Ingenico have teamed up so that brick-and-mortar stores who use the Ingenico POS terminal can simply enable a Bitpay plugin and accept BTC at the cash register.

The stage is being set for sellers of goods and services to almost seemlessly accept BTC as just another currency at the till.

As I wrote this blog post today, I was referencing CRA notices and my own records. The process meant updating my records (another plus) and ensuring I have what is necessary for last year before April this year! *happy dance*

Be sure to explore the various links in today’s post, particularly if you are a Canadian reading this! If you are dabbling in BTC, you might need this information too.


*Do note: Some of the links in this article are affiliate links.

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