Did you buy, sell or trade cryptocurrency? You must declare to Revenu Québec and the Canada Revenue Agency (CRA) your gains and losses whether with Bitcoins, Ethereum, Cardano, Litecoin or any other cryptocurrency. Then, Koinly software is of great help for us to get your tax report easily and quickly and thus declare everything correctly.
Cryptocurrency is gaining more and more popularity as people become more interested in this new sector of the economy.
So many have started placing orders to buy and sell cryptocurrencies. The famous “exchanges”. Be it Crypto.com, Shakepay, Coinbase, Binance or others.
However, did you know that we must declare our income and losses to taxes and to revenue agencies in Quebec and Canada?
What to declare and obtain as documents for taxes related to cryptocurrency
You not only have to declare your income and losses, but also all the winnings if you have “bet” on cryptocurrency, earned interest using a DeFi application or direct exchanges between cryptocurrencies.
We are also required to maintain our records for the past five years of all our transactions as described by the CRA.
We must keep the following records in connection with our cryptocurrency transactions:
- Transaction history
- Receipts for the purchase or transfer of cryptocurrency;
- The value of the cryptocurrency in Canadian dollars at the time of the transaction;
- digital wallet records and cryptocurrency addresses;
- Description of the transaction and the other party (even if it is only the address of the cryptocurrency);
- Commercial records
- accounting and legal fees;
- Program costs related to managing your tax affairs.
Determining all of this information can be quite problematic. Especially if we make several transactions during the year.
Watching how much of our cryptocurrency we bought, how much it is worth to sell, and thus whether we make profits or losses, becomes a real ordeal.
This gets even worse if you trade between cryptocurrencies, for example: buying Ethereum with Bitcoin. Verifying all transaction information takes a lot of time.
Instead of calculating everything quickly and risking making mistakes, Koinly software can greatly help us in preparing our tax report correctly.
List all your tax cryptocurrency transactions
Koinly is definitely one of the easiest software to use to list all our cryptocurrency transactions for the purpose of completing your tax return.
Its operation is very simple.
Basically, we’ll have to tell him where we made the transactions. All the big players are there, be it CoinBase, Crypto.com, Shakepay, Binance, Celcius, etc.
Koinly allows us to sync our transactions from all major cryptocurrency platforms.
We can then either give access to our platforms via an API or import our report for the year, in a CVS file, which we have previously downloaded to our favorite platforms.
The advantage of the API is that it allows real-time synchronization.
Whichever method we prefer, Koinly will then collect all information about our transactions during the year and calculate where we have made a profit or a loss.
It will then be able to generate a performance report so that we can see which cryptocurrency has performed the best based on the amounts purchased.
Quinley will also show us our total capital gain or loss for the year. Information required for our advertisement. Specifically for line 12700 of the federal tax report and line 139 for the county.
Koinly allows us to see our cryptocurrency-related gains and losses and release our tax report.
You can also request our famous full report which will list all our transactions. Thus, we are protected if we are audited by revenue agencies.
Note however that the program is in English only and its reports are also.
Expensive service depending on the number of transactions
While Koinly is undoubtedly a great help to us in determining our cryptocurrency-related activities, the fact remains that you obviously have to pay to get it.
It all depends on the number of transactions made.
You can use the program for free to see how many transactions you have made and then choose the right package. here they are:
- Newbie’s plan for 100 transactions or less at $49 USD
- Hodler’s plan for 1,000 transactions or less at $99
- Trader package for 3000 trades or less at $179
- Professional Plan for 10,000+ Transactions at $279
So it can be very expensive if you make a large number of transactions.
But for your peace of mind, to ensure your compliance, and not to be chased by revenue agencies, it’s money well spent.
Furthermore it, You can get $20 discount Using the link below and those in the column!
Learn more and use Koinly
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