Crypto Tracking Tools

Crypto.com Tax: A Free Crypto Tax Calculator to Manage Your Crypto Tax Reporting

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Crypto.com announced the launch of its own crypto tax platform – Crypto.com Tax in March 2021 with Canada as its first supported jurisdiction followed by the United States, with plans to expand to other markets in the near future.

Crypto.com Tax simplifies the filing of complex crypto taxes with its user-friendly interface and country-specific tax calculation formulas. This service, which is completely free, allows users to easily produce reliable and well-organized crypto tax reports, complete with transaction history and capital gains and losses information. We partnered with competent tax advisors to ensure that the calculation logic complies with existing guidance and laws in Canada for filing crypto taxes.

Users can upload a CSV file or use API synchronization with major platforms like the Crypto.com App to import crypto transaction records from approved exchanges and wallets. Crypto.com Tax can provide users with an estimate of taxable gains/losses on related crypto transactions in a matter of minutes, which can then be downloaded for tax reporting.

Please visit Crypto.com Tax if you need a free tool to fulfill your crypto tax reporting obligation

Is cryptocurrency Subject to Taxation?

For tax purposes in Canada, cryptocurrency is classified as a commodity. Depending on the situation and the individual’s purpose, income from crypto transactions is viewed as either capital gains/losses or business income. When users sell bitcoin, they must record the sale on their Canadian personal income tax return. On the CRA website, cryptocurrency disposition is defined as follows:

● Sell or make a gift of cryptocurrency

● Trade or exchange cryptocurrency, including disposing of one cryptocurrency to get another cryptocurrency

● Convert cryptocurrency to government-issued currency, such as Canadian dollars

● Use cryptocurrency to buy goods or services

For tax purposes in the United States, cryptocurrency is treated as property. The taxable events of crypto transactions are treated as either capital gains/losses or ordinary income, depending on the type of transactions the users have done.

What Services Does Crypto.com Tax Provide?

● Crypto.com Tax has complete integration with common exchanges and wallets, as well as a user-friendly interface that allows you to get the job done quickly.

● Crypto.com Tax is the market’s first crypto tax product that offers completely free services to anyone who wants to file their crypto taxes. We will do the estimate for you at no expense, no matter how many transactions you have had in the previous years.

● Our user interface is simple and intuitive, and aims to provide the best possible user experience when dealing with tax issues. Before your final results are generated, you can review all of the results.

How Does Tax Reporting Work?

To plan for your tax returns, it is mandatory to have complete information of your cryptocurrency transactions on exchange and wallet accounts from the time you purchased your first crypto. Even though you are only filing your tax return for 2020, in order for the cost basis to be reflected, the complete transaction history needs to be submitted to obtain results.

You can export your Crypto.com Wallet App transaction log onto a CSV file. Next, upload the CSV file to Crypto.com Tax. For tax reporting of other exchanges/wallets, visit the website and follow the instructions to connect API or upload a CSV file.

How do I know if my Cryptocurrency is Taxed?

Essentially, if you are a traditional crypto trader who treats cryptocurrency trading as a hobby, your taxable profits would be measured by subtracting the proceeds from the modified cost base of the crypto-multiplied by 50%. Any proceeds from the sale are considered capital gains and are taxed accordingly.

The income from disposition, on the other hand, would be classified as income/loss if you were running a crypto business (not a hobby). Crypto.com Tax does not support business purpose transactions at this point in time. Consequently, if your crypto transactions are business-related rather than recreational, this might not be the best tool for you.

Cryptocurrency Transactions and Taxes

Purchasing cryptocurrency (e.g CAD BTC)

Purchasing cryptocurrency is not a taxable case. However, it is important to keep track of the purchase price (along with any related fees), since this becomes the cryptocurrency’s cost basis and can be used to calculate capital gains/losses for future taxable events (i.e. dispositions, etc.)

Selling Cryptocurrency (e.g. BTC CAD)

A taxable case is the exchange of cryptocurrency for fiat currency. Subtracting the cost basis and related costs (discussed in more detail in the commission section below) from the proceeds is a way of calculating the capital gains/losses.

Property laws in other countries

If you own more than CAD 100,000 in “specified foreign property” in a given year, the CRA needs you to file the Foreign Income Verification Statement (T1135). Some cryptocurrencies can be classified as “international property” depending on their location, which is not always in the country defined by the fiat currency.

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Disclaimer : The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of Coinpedia. Every investment and trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

Sara K

Sara is steadily working on cryptocurrency evaluations, news, and fluctuations in digital currency prices. She is guest author associated with many cryptocurrencies admin and contributes as an active guide to readers about recent updates on virtual currencies.

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