Ndax makes tax reporting easy with comprehensive reports and tax software integration, helping you file your crypto taxes effortlessly.
Simplified Crypto Tax Filing
Receive detailed tax reports that compile all your cryptocurrency transactions, ensuring you have all the necessary information for accurate tax filing.
Take advantage of seamless integration with popular tax software, allowing you to easily import your Ndax transaction data and streamline the tax filing process.
Effortlessly manage your cryptocurrency taxes with the powerful integration of Ndax and Koinly.
Frequently Asked Questions
In Canada, cryptocurrency is considered taxable by the Canada Revenue Agency (CRA), treating it as property. Gains from crypto transactions are subject to taxation, with the specific treatment depending on whether the transactions are categorized as business income or investment income, which may result in capital gains and losses. For capital gains, 50% is taxable, while 100% of business income is subject to taxation. For this guide, we’ll focus on capital gains for individuals. It’s important to speak with a qualified professional, particularly if you believe you are running a business.
When you incur a disposition, it’s important to consider your tax liability. A disposition can occur through the following: Selling for fiat or another asset, trading crypto to crypto, using crypto to buy goods or services, gifting or donating, ordinary income tax applies to cryptocurrency earned, determined by the fair market value at the time of receipt. For Canadian taxpayers, 50% of capital gains and 100% of ordinary income derived from cryptocurrency are considered taxable.
Made losses on your crypto? You won't incur any Capital Gains Tax on crypto-related capital losses, but there is a silver lining that allows you to leverage these losses strategically to minimize your tax liability.
Offsetting your capital losses against capital gains serves as a valuable tool to decrease your overall tax burden. Adhering to the 50% rule for capital gains, you can offset only half of your net capital loss in a given year. If there are remaining losses after this offset and you have no capital gains in the current year, you can carry forward half of the capital losses to offset against future gains in subsequent financial years. It’s worth noting the CRA also allows you to carry back losses up to 3 years prior using Form T1A.
However, Canada has a superficial loss rule to prevent wash sales. It kicks in when you sell an investment at a loss and re-acquire it within a 30-day period (applies before and after a sale)
This rule prevents taxpayers from creating losses purely for tax purposes where they still intend to hold or repurchase that asset in a short period. You can usually add the amount of the loss to the adjusted cost base of the substituted property.
Despite the degree of anonymity crypto transactions offer, the Canadian government has the capability to trace them. Additionally, the CRA can request information where necessary from taxpayers so it’s important to have accurate record-keeping to substantiate your tax affairs.
Canadian taxpayers should file crypto taxes as part of their annual Income Tax Return. Reporting involves listing all capital gains from crypto sales in the income portion of the taxes. The use of an adjusted cost basis or average cost is required for calculating capital gains, emphasizing the importance of maintaining accurate records of all crypto transactions.
Canada does not impose taxes based on the duration of holding cryptocurrency. Whether trades are short or long-term does not impact tax obligations. There is no tax for simply HODLing cryptocurrency as a Canadian taxpayer.