Cryptocurrency is a type of digital currency or payment that may be used to buy and sell goods and services on various online platforms. To work, cryptocurrencies rely on a sort of technology known as a blockchain- a form of a highly secure database that records and maintains transactions. For income tax purposes, cryptocurrency is considered a capital asset, which means it is treated the same as any other gain on the sale of a capital asset (Canada Revenue Agency, 2019).
To calculate capital gain on cryptocurrency, simply subtract the selling price of your cryptocurrency at the time of the transaction from your adjusted cost base. The adjusted cost base, or ACB, is simply the asset’s book value, or its original acquisition price... [read more]