How do deal with your Cryptocurrency Bookkeeping. When you buy and sell cryptocurrency whether it’s through trading or mining you must keep records of all transactions for your bookkeeping record. If you are a business that accepts cryptocurrency as payment you will need accurate bookkeeping.
Since all the cryptocurrency exchanges are different you must keep your records yourself. It is not the responsibility of the exchange but you to keep accurate bookkeeping records.
Dealing in Cryptocurrency’s is a very complicated asset class. I would recommend working with a professional who can help guide you through what is required to be compliant with CRA.
Here are the main items you must keep in your bookkeeping records:
Date of when the transactions occurred
Proof of the transaction
Canadian value at the time of the transaction
Records of cryptocurrency addresses and details of digital wallets
Details of the transactions and the other side of the trade i.e. who the transaction was with or at the minimum Cryptocurrency address
Cryptocurrency exchange records
All bookkeeping, record keeping, legal and accounting details
All operating costs including software
For mining purposes you will also need to keep these records:
The hardware related costs associated Cryptocurrency mining
Proof of operating costs that would include maintenance hardware mining pool fees and power costs.
Details of mining pool records
When you value the cryptocurrency as either income or capital property you must keep accurate records of your adjusted cost base.
Value each item in inventory at the cost or format for market value when it was acquired. Secondly valuing the inventory the inventory annually at the fair market value is also required.
GST/HST does apply to cryptocurrency services. We’re taxable event occurs when the services provided in cryptocurrency the GST/HST must be calculated at the fair market value.