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Do I have to claim investment income if all my gains or dividends were paid back into the portfolio and I did not withdraw any money?

Dividend paying ETF and old crypto wallet going up and down and I did not touch them except to add a bit of money
1 Reply

Do I have to claim investment income if all my gains or dividends were paid back into the portfolio and I did not withdraw any money?

Yes, the Canada Revenue Agency(CRA) announces that you should report business income or capital gains from the disposition of cryptocurrency

This refers to the way you get rid of something, such as by giving, selling or transferring it. In general, possessing or holding a cryptocurrency is not taxable. But there could be tax consequences when you do any of the following:

  • sell or make a gift of cryptocurrency
  • trade or exchange cryptocurrency, including disposing of one cryptocurrency to get another cryptocurrency (your situation, profit back into the portfolio)
  • convert cryptocurrency to government-issued currency, such as Canadian dollars
  • use cryptocurrency to buy goods or services

 

It's kind of a gray zone for crypto. For example, if you bought stocks and then sold them for a gain, it’s a taxable event. Just because you haven’t withdrawn any physical cash from your accounts doesn’t change that fact. This is no different from selling stocks and not withdrawing the money from your account. Make sure you keep records of your cryptocurrency transaction in case the CRA asks to see them.

 

 

For more information, please click: 

Canada Revenue Agency(CRA)Guide for cryptocurrency users and tax professionals

Canada Revenue Agency(CRA)Investing in cryptocurrency

 

 

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