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I have helped hundreds of people successfully navigate from the US to Canada. If you're thinking of moving or retiring to Canada contact me today to chat about your plans.

I can be reached via email at phil@philhogan.com, by phone at 250-661-9417 or through my contact page here.

I look forward to speaking to you soon.

Phil Hogan, CPA, CA, CPA (CO)
Cross-Border Tax and Investment Specialist

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Question

Hi

I run a consulting practice in Vancouver and I have a few US clients. Once of my US clients pays me in Bitcoin and Ether (crypto currencies). I receive transfer payments each month. When I do my taxes for 2017 I need to know how much to report on my tax return.

What conversion rate do I use to report the amounts? Or do these even need to be reported?

Thanks

XXXXX

Answer

Hi XXXXXX

Yes, the income amounts certainly need to be reported on your Canadian tax returns. Not only that, you may also have some capital gain/loss component if you convert your crypto to cash.

In terms of the exchange rate you’ll have some options. I would simply google BTC to Canadian dollar converter to find a good conversion tool. Each time you receive a block of bitcoin I would convert the amount at that particular day into Canadian dollars and record it as revenue. When you actual convert the bitcoin to Canadian dollars you may also have to record a gain/loss on the actual currency fluctuation. For example, if you earned bitcoin at $5000 Canadian dollar and it was at $5,500 when you converted to Canadian dollars you would actually have a $500 capital gain. Don’t forget to make these conversion calculations as bitcoin tends to move quite dramatically.

It’s not entirely clear from you email whether you’re incorporated or not, however you should be filing some form of treaty based US tax return to report your business activities in the US. That’s assuming you don’t have a permanent establishment in the US.

Hope that helps.

Phil