As Cryptocurrencies Continue to be Legitimized How Open and Available to Taxation are They?


... When cryptocurrencies first came to light in the mainstream, and the regulators realised that they should be subject to taxes, it was capital gains that were initially applied on them - this was also at the time when Bitcoin was skyrocketing in value.

Kevin Hobbs, CEO of Vanbex Group, explains the situation in Canada where capital gains tax is part of the cryptocurrency tax environment.

“In Canada, cryptocurrency is subject to the Income Tax Act, and treated as commodities that you would need to record gains or losses on,” said Hobbs. “As a result, when one cashes out cryptocurrency profits into fiat, it is taxed exactly as capital gains. You have to declare capital gains when you sell property or investments for more than you paid.

“For example, if you bought shares for $10,000 and sold them for $15,000, you have to declare a $5,000 capital gain in the year you sold the shares. As of 2018, the capital gains inclusion rate is 50 percent, you would include $2,500 in your total taxable income. In short, this is more of an integration than evolution. What we’re seeing is countries like Canada working to define this new type of asset to fit into existing frameworks...” 

Read Full Article