if so- 1- how was it? what information did you have to give? 2- what was your trading activity like? frequency of trades and average holding time 3- was crypto your only source of income? 4- what happened in the end? we're you revised as business income? 5- main reasons that caused you to be classified as capital gains or business income?
how common is it to get audited if you claim capital gains on crypto? What are the main reasons for being reclassified as business income instead of cap gains?
Since we don’t provide a transaction history when filing capital gains, how does the CRA determine if they want to audit you?
Parker Thomas
Random
Eli Ramirez
1. all transaction records and addresses 2. 200 trades through the year, mostly with a small portion on cexes. 3. no, had a real job 4. it was revised to business income and I had to pay interest on the extra amount 5. amount of gains
It's not common to get audited unless you are making above 6 figures. If you're above then it's almost guaranteed you'll get audited within 3 years. The main reason for classifying business income is purely arbitrary, if you look at the CRA page on this, it literally says they can classify you as business income even if you made one trade.
It's almost always determined by the amount
Nathaniel Richardson
So anyone who claims more than 6 figs in profits as capital gains should expect an audit within 3 years? If you don’t mind disclosing, how much around did you claim?
Has this been purely from personal experience, or do you know of other cases (friends/acquaintances) too? Thanks for sharing.
Aaron Wright
Did you need to disclose previous years transactions?
Blake Sullivan
Bump
Dominic Barnes
I was audited for my first year of crypto. So I did not have to. But if you've been around, I'm pretty sure you do have to since the status of whatever assets you had at the start of that year will be dependent upon the previous years. BUT I have heard they cannot go more than 3 years back for audits though.
I claimed a little under 200k. Was audited a little over 1 year after reporting. It's mostly personal experience but I got an accountant after all this and got recommended to report as business income for very similar reasons. Maybe 6 figures isn't the cutoff, but the amount is definitely one of the primary factors
I'm sure a lot of people get away without ever getting audited too. But at the end of the day the more you're making the more you are at risk of an audit. And most people can't really afford to pay up to 3 years of interest on their owed taxes which could be why most accountants just recommend you to report as business income.
With that said, an audit is just an audit, it doesn't mean that you will 100% be fucked over and categorized as business income. If you reported correctly, and have very solid arguments and evidence in place to disagree with their possible business income ruling, I would still report as capital gains. For me I didn't really have that option since my 200 trades was considered alot by the CRA.
The main factors are total gains > number of trades > amount of time between those trades
Jordan Diaz
May i ask what your average holding period was? We’re those trades spread out evenly throughout the year or were there some months where you traded more/less?
Also if you dollar-cost average in and out, do they count those as separate trades or can you merge them?
Hunter Wilson
It was inconsistent throughout the year, during that time I had 0 idea about the tax obligations so I had quite a few coins that I bought and sold a few days later on binance, but I also had ones I held onto for more than 6 months before selling. If I had to guess the average across everything was probably around 1 week
>if you dollar-cost average in and out, do they count those as separate trades or can you merge them? As far as I know you can't merge them, they should be counted as separate "trades". Which is why its extra retarded for the CRa to put so much emphasis on # of trades
Colton Brown
Did you have/use a CPA?
Noah Torres
Also, say you have many different assets and you “traded” eth but just “held” btc. Could you arguably say the eth was income but Bitcoin capital gains ? How is it fair that if you just “trade” one of your digital assets ALL of them are treated as income
Ian Hall
How long did the audit take? When the auditor told you it was business income, did you try and argue it was capital gains or did you just pay?
Chase Davis
>paying taxes on crypto >in canada Lmao wtf how much did you make? If you dont say over 100k then youre retarded
Nathaniel Robinson
Did you have to pay penalties/interest when it changed to business income after 1 year?
Dominic Roberts
How exactly are you supposed to avoid taxes if you're cashing out to a Canadian bank?
Just a reminder that OP is a glowie trying to get you to oust yourselves for not paying taxes. Any Forums is NOT actually anonymous and logs that law enforcement have access to are kept that include things like your IP address, your posts and browser information acquired by trackers.
Moot is still a faggot, jannies are trannys and you require a Any Forums gold pass to view the rest of this post.
Jose Gray
OP is asking for people who have already paid their taxes Retard
James Ramirez
If you were canadian you'd understand why no one respects our law enforcement
Alexander Brooks
No, I tried for subsequent years but I don't think they're that useful. if you reported correctly and have all your records there is not much reason to. Also they will always go the safest possible route if theres any uncertainty at all so in most situations it'll just be business income
I don't think you can separate them unless it's staking income or something. Their reasoning is that you are now categorized as a "trader" and all your trades are for the purpose of generating profit
It took under 2 months. But I had some trouble getting my records, so if you have everything in place it will probably be less. And I didn't fight it, in hindsight I probably should have, but they made the ~200 trades sound like a shitload so I didn't even bother.
I did, but this depends on your attitude and perceived negligence, if you are able to show you put your best foot forward throughout this whole process they probably won't make you pay the interest
Anthony Davis
This country is so fucking retarded. I’d be fine with ensured capital gains but then 3 years later they can say nope sorry you owe us this as income WITH interest? Holy fuck. Don’t even know what to do bros. Crazy thing is I know by any sane definition I am a holder, but just because I’ve DCA’d into certain holdings they can interpret that however the fuck they want. They just don’t want the little man to make it I swear
