REVscene Automotive Forum - Question on CryptoCurrency tax info

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Question on CryptoCurrency tax info

As i know if you deposit over 6K or 10K (Can't remember what was the limit) within a month, Bank will report to CRA.

But if i withdraw 2-3K every month to my bank direct deposit, will bank report this activity to CRA ?

Maybe we should report this thread to the CRA right now......

Deposits of >$10k cash are reported. As well as unusual activity.

^ It is Fintrac that money moving around over $10k gets reported to... it's not CRA.

Are you trying to avoid paying capital gains tax, or just good old fashioned money laundering? lol

Quote:

Originally Posted by Hakkaboy (Post 8959581)

Are you trying to avoid paying capital gains tax, or just good old fashioned money laundering? lol

I'm taking profit out. I'm too poor to do money laundry. Lol

So far, I have not take any of it out.

My accountant is telling me to report it as capital gain on the amount that I'm taking out.

Quote:

Originally Posted by ime2006 (Post 8959587)

I'm taking profit out. I'm too poor to do money laundry. Lol

So far, I have not take any of it out.

My accountant is telling me to report it as capital gain on the amount that I'm taking out.

It would be a capital gain if you were in the long game for crypto. However, if you're actively trading crypto then the CRA could make a case for business income.

100% of your business income is subject to taxes at your marginal tax rates; whereas, only 50% of your capital gain is subject to tax at your marginal tax rates.

And, for further clarity, the calculation for a capital gain (if it was that) is not based on the amount of money that you take out of your crypto account. A capital gain is equal to sale price of your crypto minus your adjusted cost base. It's still a reportable and taxable event if you've realized a capital gain in your crypto account and whether you've taken the funds from your crypto account and moved it to your regular bank account is irrelevant for tax purposes.

Speaking of ACB (adjusted cost base), here's a great resource in calculating it:

https://www.adjustedcostbase.ca/

Obviously your accountant would tell you to report it. He'd lose his license to practice if he doesn't and gets found out.

Only way for CRA to audit is to enforce transaction reporting from exchange annually like traditional securities exchange. I don't think the process for them to do this currently exists (could be wrong).

I don't think the exchanges report any transactions to the CRA.