Do I need to declare capital gain when buying BTC to trade for another coin?
Do I need to declare capital gain when buying BTC to trade for another coin?
Loading saved threads...
Ok_Selection_505 · External communityPost link
External question — Personal Finance Stack Exchange
Author: Ok_Selection_505
Original post: https://money.stackexchange.com/questions/152725
License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/
Adaptation: HTML converted to plain text; contact email addresses removed.
In 2017, I wanted to by XRP. There was no way to buy XRP with fiat, only with BTC.
So I first bought 1 BTC for $20,000
I immediately sent that 1 BTC to an exchange so I can trade it for XRP. The transaction fee to send the 1 BTC to the exchange was 0.001, so the resulting amount of BTC that landed in my account on the exchange was 0.999 BTC. I then immediately traded my 0.999 BTC for 18,000 XRP (trading fee included). All this was done on the same day, and the process took about 1 hour.
In 2021, I traded my 18,000 XRP for 2 BTC (trading fee included). On that day, 1 BTC was $30,000 at fair market value.
Here's the tricky question: when I bought BTC in 2017 in order to acquire XRP, that was technically a taxable event. Do I really need to declare a capital gain/loss when I traded my BTC for XRP? Not only would it be a very negligible amount (if any), but I also have no idea how I would calculate it. I am in Quebec, Canada, and I don't think the CRA would even care about it either. Can I just declare that I bought 18,000 XRP for $20,000 and then sold it for $60,000, so my capital gain is $40,000?
I don't think the CRA really cares about negligible amounts like this, but I don't want to make any dangerous assumptions either.
Quote
Report
Post Reply
Quoted from Forex.com.bd-Editorial External question — Personal Finance Stack Exchange Author: Ok_Selection_505 Source score (net votes, not local likes): 3 Original post: https://money.stackexchange.com/questions/152725 License: CC BY-SA 4.0 — https://creativecommons.org/licenses/by-sa/4.0/ Adaptation: HTML converted to plain text; contact email addresses removed. In 2017, I wanted to by XRP. There was no way to buy XRP with fiat, only with BTC. So I first bought 1 BTC for $20,000 I immediately sent that 1 BTC to an exchange so I can trade it for XRP. The transaction fee to send the 1 BTC to the exchange was 0.001, so the resulting amount of BTC that landed in my account on the exchange was 0.999 BTC. I then immediately traded my 0.999 BTC for 18,000 XRP (trading fee included). All this was done on the same day, and the process took about 1 hour. In 2021, I traded my 18,000 XRP for 2 BTC (trading fee included). On that day, 1 BTC was $30,000 at fair market value. Here's the tricky question: when I bought BTC in 2017 in order to acquire XRP, that was technically a taxable event. Do I really need to declare a capital gain/loss when I traded my BTC for XRP? Not only would it be a very negligible amount (if any), but I also have no idea how I would calculate it. I am in Quebec, Canada, and I don't think the CRA would even care about it either. Can I just declare that I bought 18,000 XRP for $20,000 and then sold it for $60,000, so my capital gain is $40,000? I don't think the CRA really cares about negligible amounts like this, but I don't want to make any dangerous assumptions either.
Checking account access…