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Cryptocurrency is becoming a great place to invest your money. It is definitely the next big thing. However, there is almost negligible tax involved in it. There is also no tax when someone moves their cryptocurrency between two wallets, exchanges, or accounts.
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Buying Cryptocurrency? Here’s a great Vancouver crypto exchange!
Cryptocurrency is becoming a great place to invest your money. It is definitely the next big thing. However, there is almost negligible tax involved in it. There is also no tax when someone moves their cryptocurrency between two wallets, exchanges, or accounts. This is another situation where records are vital as the price paid for the crypto in the original wallet will be used to calculate the cost basis. Let’s find out more about buying digital currencies at Vancouver crypto exchanges like Netcoins!
● Buying cryptocurrency and taxes involved in it There are no taxes for buying cryptocurrency either. That said, anyone who buys cryptocurrency intending to hold on to it should keep accurate records. The value at the time of purchase will be necessary to calculate the cost basis in the future when or if the cryptocurrency is sold. ● Selling cryptocurrency for fiat amount When someone sells cryptocurrency for fiat like CAD, this will be taxed as a capital gain. Remember that each cryptocurrency must be listed separately. Calculating the cost basis will require the price at both the time of purchase and the time of sale.
● Selling one cryptocurrency for another When someone sells a cryptocurrency in exchange for another cryptocurrency, this is also taxed as a capital gain. To calculate the cryptocurrency’s value at the time of sale, look at the value of the cryptocurrency being sold. ● Using cryptocurrency to make a purchase The CRA considers using cryptocurrency to buy something as bartering. As such, taxpayers would do a similar calculation when they sell a cryptocurrency. As with selling one crypto for another, they must determine the value of the goods or services bought with the crypto. This then counts as the amount that the cryptocurrency was sold for.
● Earning cryptocurrency Those who earn cryptocurrency for their work will have to report it as income. This involves reporting its value at the time of acquisition. CONCLUSION The most important point is that Canada taxes cryptocurrency earnings. Because this type of taxation is still fairly new and may evolve, it is typically smartest to consult with a tax accountant specializing in cryptocurrency. The easiest way to ensure you are following the proper protocol is to have the expert complete your taxes. You can also hire an expert to confirm whether your cryptocurrency profits should be reported as business income or capital gains. As with any investment, it’s smart to understand how your transactions will be taxed before you begin investing in cryptocurrency.
Luckily, the Canadian Revenue Agency (CRA) has clear guidelines on cryptocurrency and taxes, so there shouldn’t be any confusion regarding the amount. Also, if you’re looking up on the internet to research how to buy Ripple in Canada, Netcoins is your one stop solution. Find one of the best crypto exhale platforms in Canada with Netcoins.SOURCE CREDIT: https://medium.com/@netcoinscanada/buying-cryptocurrency-heres-a-great-vancouver-crypto-exchange-fbe85063a522
