Where do i input capital gains for crypto

[matthew-astill7]

I have gains from crypto sales do i input it as additional income

[andreap5]

Reporting capital gains from cryptocurrency transactions in TurboTax Canada can be done by following these steps. It is vital to note that in Canada, cryptocurrencies are treated as a commodity for tax purposes, and any gains or losses from selling or trading cryptocurrencies must be reported as either income or capital gains, depending on your circumstances.

Step 1: Determine the Type of Earnings

First, determine whether your transactions from cryptocurrencies need to be reported as business income or as capital gains. This depends on the nature of your transactions (e.g., frequent trading might be considered business income). For most casual investors, gains will typically be categorized as capital gains.

Step 2: Calculate Your Capital Gains

Before entering information into TurboTax, calculate your capital gains for each cryptocurrency transaction:

• Adjusted Cost Base (ACB): Calculate the cost base, which includes the purchase price plus any associated costs (like transaction fees).
• Calculate Gain or Loss: Subtract the ACB from the proceeds of disposition (the amount received from the sale).
• Record Keeping: Ensure you maintain detailed records of all transactions, dates, values in CAD at the time of transaction, expenses, and receipts.

Step 3: Input Capital Gains in TurboTax

Once you have your total capital gains calculated, you can input this data into TurboTax:

Using TurboTax Online or Desktop Software:

1. Open TurboTax and navigate to the 'Income' tab.
2. Find the section for 'Investment Income'.
3. Select ‘Capital Gains or Losses’. TurboTax can handle both straightforward capital gain entries and more detailed entries.
4. Report your Capital Gains:
   • Report the total amount from all your cryptocurrency transactions as either proceeds from disposition or as a capital gain.
   • Manually enter the details of each transaction or upload a CSV file if you’ve kept detailed records digitally.

Import Transactions:

• If you use a cryptocurrency management tool that tracks transactions and can export data in a CRA-friendly format (like AdjustedCostBase.ca, CoinTracking, or similar), you might be able to directly import this data into TurboTax if you're using a version that supports the import.

Step 4: Review and Confirm

• Review: Make sure all the numbers look correct. Double-check that you've entered all transactions from the year and that the gains and losses are calculated correctly.
• Use CRA’s Auto-fill: If available, use the CRA Auto-fill feature to automatically fill in parts of your return, ensuring there are no discrepancies between your records and data available to CRA.

Step 5: File Your Taxes

Once all your financial data is accurately entered, you can proceed to file your tax return.

Additional Tips:

• Stay Informed: Cryptocurrency tax laws can change, and staying informed about these changes is essential.
• Documentation: Make sure to keep records of all your cryptocurrency transactions for at least six years after you file your annual tax return in case the CRA asks to see them.
• Consult a Professional: If you have substantial transactions or are unsure about the tax implications, consult a tax professional who is knowledgeable in cryptocurrency transactions.

By following these steps, you can accurately report your capital gains from cryptocurrencies using TurboTax Canada, navigating the complexities of crypto taxation correctly.