Due to cryptocurrency being categorized as a commodity, tracking gains and losses per coin is required for tax purposes. Like a commodity:
- Capital gain would be if the sale price of the cryptocurrency is in excess of the acquisition cost. This amount would be taxable at 50% of the tax rate.
- Capital losses would be if the acquisition cost of the cryptocurrency is in excess of the sale price. This amount can be used to write-off other capital gain (regardless if the gain originated from a different cryptocurrency).
Note: most cryptocurrency transactions are denoted in US Dollars (USD). This will require the taxpayer to translate all amounts of capital gain / loss calculation (acquisition costs, sale price, etc.) to Canadian Dollars (CAD). The exchange rate that should be used to translate the transaction is the rate of the transaction, not the exchange rate the end of the tax period.