What are the Tax consequences for Cryptocurrency via rewards programs?

[M-N]

Some Cryptocurrency Projects have a reward program for participating in a network or specific use. This can be seen in Projects such as Lbry’s Credits or The Brave Browser’s “Brave ads” with their Brave Attention Token.

Last May I signed up for Lbry’s Creator Rewards program that was basically users Beta testing the software/network. It could be watch a video, follow X amount of people just to see how the network worked, then you’d received Lbry’s Credits (LBC) Which you could cash out or send to another user as a “Tip.” I only ever tipped users on the platform from the Crypto I’ve received as they would have more used of it than I would; I only wanted to see how the network worked for the time being and I did not want to get involved with exchanges at this point.

After reading over CRA’s Cryptocurrency Guide I have to wonder what these sorts of systems fall under, if any tax consequence at all?

Do these count as a barter transactions? If so what would need to do within Turbo Tax to file properly?

I kind of have a feeling that I need to upgrade since I have the Standard version of the software currently installed.

Thank you for your time, and I await any advice that could be offered.

[Surajth]

We appreciate you choosing TurboTax

The total amount of LBC earned in a year must be declared as income.

You have done disposition if you transfer your credit to someone else. A disposition is a way of getting rid of something, such as giving, selling, or transferring it. Owning or holding a cryptocurrency is generally not taxable. However, if you do any of the following, there may be tax consequences:

• Buy cryptocurrency or give it as a gift
• trade or exchange cryptocurrency, including disposing of one cryptocurrency for another
• as well as converting cryptocurrency to government-issued currency, such as Canadian dollars
• in order to buy goods or services

Please visit the links provided for further clarifications:

1. CRA:  Guide for cryptocurrency users and tax professionals
2. CRA: Barter Transactions
3. TurboTax article Bitcoin Explained with Your Tax Implications  
4. TurboTax FAQ How do I report the sale of cryptocurrency on my taxes?
5. Community discussion Anyone here done a tax for cryptocurrencies? I don't know where to put them on the tax

Please visit our Contact Us page, choose the Platform tab, and ask a question to get help from our TurboTax Support team, or contact us by phone  or on Facebook if you need further assistance.