Digital currencyYour question is: "How and where to enter the gain or loss of cryptocurrency (Bitcoin)".
When you buy or sell digital currency, the Canada Revenue Agency considers that you have realized a gain or loss on the purchase or sale.
The CRA regards digital currency (Bitcoin) as merchandise and its use must comply with the barter rules of the Income Tax Act.
For more information, please consult the following link:
In addition, starting in 2020, Revenu Quebec added a new question to the "Revenu Quebec questions" page entitled "Did you received virtual currency?".
To report a gain or loss on your cryptocurrency transactions, please follow the procedure below:
1. In the "Left-side menu on the Interview tab", select "Interview setup".
2. On the right-hand side of the screen, go to the "Investment income and expenses" group, check for "Capital gains (or losses) and capital gain history" and click on "Next" at the bottom of the page.
3. Return to the "Left-side menu on the Interview tab", select the topic "Capital gains (or losses) & ABIL".
4. On the screen to your right, click on the plus sign "+" icon to the right of the line "Vrtual currency transactions".
5. Enter the information about the trans action. It is mandatory to indicate the "Date of disposition" as well as the "Proceeds of disposition", you should specify the ''Adjusted cost base of shares or property'', namely the cost of acquisition of the cryptocurrency the same way you should enter the cost of the ''Expenses incurred in making the disposition''.
6. In addition, if you have requested a ''Reserve on disposition'' you must specify it.
The net capital gain or loss will be reported by the program on Schedule 3 of the federal returns on line 13200 and, if applicable, on Schedule G of the Quebec returns, in the new "Virtual currency operations" section of Part A.
The capital gain will be reported on line 12700 of the federal return and, for Quebec residents, to line 139 of the Quebec return.
If you have incurred a loss, this will be mentioned in both the federal and Quebec notices of assessment.ID: 20201216093531DE.xml
Webpage: KPA330-20201216093531DE.htm