Unfiled Crypto Tax Solutions
Crypto Tax Audit Assistance
A CRA tax audit can be triggered if you don’t file your NFT or crypto taxes. CRA tax audits can be both intimidating and expensive, but a crypto tax lawyer can help you minimize your costs if the CRA is auditing your records.
Correcting Crypto Tax Mistakes
There may be penalties associated with back taxes even if you correct a crypto tax mistake by reporting crypto gains later on. A crypto tax lawyer will help you correct crypto tax mistakes and mitigate the penalties.
Crypto Tax Reporting
Do you know whether you should report NFTs and crypto on your taxes as a capital gain or business income? Get crypto tax tips from a crypto tax lawyer who can help you report Bitcoin and all other cryptocurrencies to the CRA.
Voluntary Disclosure Program
The Voluntary Disclosure Program is a relief program for unfiled or inaccurate taxes. If you don’t report NFTs or crypto on your taxes, you can correct that mistake with the VDP with more favourable repayment terms than if the CRA found the inaccuracies themselves.
How to File Crypto Taxes
Identify the Tax Due Date for the Year
The tax due date for the year is different for corporations than it is for individuals. If you are trading NFTs or cryptocurrency through an incorporated business, your filing due date is no later than six months after the end of your tax year.
Business Income or Capital Gain?
How you report crypto gains or losses can affect the rate at which it’s taxed. You may have to report crypto on your taxes as either business income or capital gains, depending on the nature of your crypto transactions.
Reporting Crypto Tax As Business Income
Conducting NFT and crypto transactions as part of business activity with the intention of making a profit means you must report crypto gains as business income. This means the entire gain is considered taxable income.
Reporting Crypto Tax As Capital Gain
When you report crypto taxes as capital gains, only half of the amount is taxable, and gains can be offset by claimed capital losses. If the sale of cryptocurrency does not constitute a business, you can claim crypto on your taxes as capital gains.
Trading one cryptocurrency for another is still a taxable event. When you trade one cryptocurrency for another, the transaction is considered a disposition. It must be reported on your income tax return using the fair market value of the currency at the time of the disposition.
Reporting Cryptocurrency Earnings Through Mining or Staking
Cryptocurrency earnings through mining or staking must also be reported on your taxes. The income tax treatment depends on whether mining is conducted as a business activity or a personal activity. This is determined on a case-by-case basis.
Bookkeeping & Recordkeeping
Any time you acquire or dispose of cryptocurrency, you are responsible for keeping records of your cryptocurrency transactions. You must keep a record of all cryptocurrency exchanges for at least six years.
GST & HST Applications
When you make a purchase with cryptocurrency or accept cryptocurrency as payment in exchange for goods or services, GST or HST must still be paid on the transaction. The value of cryptocurrency for GST/HST is calculated based on fair market value at the time of the transaction.
Crypto Tax Returns
Talk to a crypto tax lawyer to learn how to report crypto on your taxes, crypto tax planning, reporting capital gains or losses, and what to do if you have unreported crypto taxes from previous years.