Are Bitcoin Profits Taxable in Canada?

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In Canada, profits from Bitcoin and other cryptocurrencies are generally taxable. The Canada Revenue Agency （CRA） treats cryptocurrencies as commodities, not as legal tender. This means that any gains from buying, selling, or trading Bitcoin are considered taxable income and must be reported on your tax return.

For individuals, if you sell Bitcoin for a profit, it is typically classified as a capital gain. Only 50% of the capital gain is included in your taxable income. However, if you are actively trading Bitcoin as a business, the profits may be treated as business income, which is fully taxable. It is important to keep detailed records of all transactions, including dates, amounts, and purposes, to accurately report to the CRA.

Additionally, other activities like mining Bitcoin or receiving it as payment for goods or services are also taxable events. Miners must report the fair market value of mined coins as income, and businesses accepting Bitcoin need to include it in their revenue. Failure to report these profits can result in penalties and interest charges from the CRA.