By Jacqueline M. Demczur

CRA Releases Tax Tips on Cryptocurrency Transactions

With the rise of cryptocurrency donations, it is important for charities and not-for-profits to understand their tax obligations and the importance of keeping accurate records.  This is consistent with the general requirement imposed on charities to keep adequate books and records at all times.

The Canada Revenue Agency (CRA) has released a Tax Tip article, “Keeping records of your cryptocurrency transaction,” published March 27, 2023.  The article emphasizes the importance of keeping detailed records of all cryptocurrency transactions. 

To ensure accurate financial information, the CRA states that records should be kept for each cryptocurrency transaction, including, but not limited to, the following:

• date of the transaction
• the cryptocurrency addresses
• the transaction ID
• receipts for the purchase or transfer of cryptocurrency
• value of the cryptocurrency in Canadian dollars when you made the transaction
• a description of the transaction and the other party (such as their cryptocurrency address)
• exchange records
• wallet records
• accounting and legal costs
• software costs related to managing your tax affairs

More information on tax obligations relating to cryptocurrency activities can be found in the CRA’s Guide for cryptocurrency users and tax professionals. However, please note that the CRA is currently updating this Guide.

It is important to seek professional tax and legal advice to understand the implications of accepting and holding cryptocurrency.

​Read the April 2023 Charity & NFP Law Update