Canadian Income-Tax Treatment of Profits from Disposing of Blockchain Non-Fungible Tokens
Canada's Income Tax Act sets out two entirely different tax regimes for business income, on the one hand, and for capital gains, on the other. If you trade NFTs and thereby earn business income, your non-fungible tokens constitute inventory, and your NFT-trading profits are fully taxable. Most marketplaces charge a gas fee for each NFT transaction. As mentioned above, a gas fee is a processing fee for the computing power it takes to validate NFT transactions on the blockchain. If you carry on an NFT-trading business, your transactional gas fees qualify as deductible business expenses.
If your non-fungible token qualifies as capital property because you acquired it for investment purposes, then you include only one-half of the gain when computing your taxable income for the year in which you disposed of that non-fungible token. In this case, gas fees on NFT purchases are capitalized and included in the adjusted cost base (ACB) of that non-fungible token. Gas fees on an NFT sale will offset the proceeds of disposition for that non-fungible token.
it wouldn't do me any good anyways... someday I hope to have the hardware and the time and the money for sc, but its not today. it was the first example that came to mind when i read 'digital store of value'
Are the ships NFTs or something? I know trading one crypyo coin for another is a taxable event, but I really don't know about NFTs.
the law in canada says 'any digital store of value'
This is my best guess:
Canadian Income-Tax Treatment of Profits from Disposing of Blockchain Non-Fungible Tokens Canada's Income Tax Act sets out two entirely different tax regimes for business income, on the one hand, and for capital gains, on the other. If you trade NFTs and thereby earn business income, your non-fungible tokens constitute inventory, and your NFT-trading profits are fully taxable. Most marketplaces charge a gas fee for each NFT transaction. As mentioned above, a gas fee is a processing fee for the computing power it takes to validate NFT transactions on the blockchain. If you carry on an NFT-trading business, your transactional gas fees qualify as deductible business expenses.
If your non-fungible token qualifies as capital property because you acquired it for investment purposes, then you include only one-half of the gain when computing your taxable income for the year in which you disposed of that non-fungible token. In this case, gas fees on NFT purchases are capitalized and included in the adjusted cost base (ACB) of that non-fungible token. Gas fees on an NFT sale will offset the proceeds of disposition for that non-fungible token.
https://www.mondaq.com/canada/tax-authorities/1061890/canadian-income-tax-implications-of-buying-selling-blockchain-nfts#:~:text=Canada's%20Income%20Tax%20Act%20sets,trading%20profits%20are%20fully%20taxable.
its quite specific that exchanging one cryptocurrency for another is a taxable event
? name checks out
it wouldn't do me any good anyways... someday I hope to have the hardware and the time and the money for sc, but its not today. it was the first example that came to mind when i read 'digital store of value'