This article will primarily focus on the step-by-step instructions for filing crypto taxes as a capital gain (or loss) with H&R Block Canada, using the information obtained from your cryptact Summary Report.
cryptact simplifies the process of calculating your cryptocurrency gains and losses by consolidating transactions across multiple exchanges and wallets, ensuring accuracy in your tax filings. By using cryptact to generate a complete and structured Summary Report, you can seamlessly enter your crypto-related tax information into H&R Block Canada, reducing manual calculations and minimizing errors.
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Step-by-step Instructions for filing your crypto taxes with H&R Block Canada
Before you jump into H&R Block site, be sure you prepare numbers you will report from cryptact Summary Report.
On cryptact
1. Sign up or log in to cryptact and sync all the wallets, exchanges, and blockchains you use via API or by uploading a CSV file.
2. cryptact will then calculate your crypto taxes including your capital gains, losses, income, expenses, and more.
Please make sure all your transaction data is added. If an error message is displayed, please follow the guidance provided to resolve it. Until all errors are cleared, the calculations will not be accurate. If you have any questions, please feel free to contact our customer support team.
3. Go to your account page and click transaction tab on the left corner.
4. You will find the download icon right above the transaction history, click the icon
5. Select the year you wish to download. Zip file will be downloaded which includes all figures you need to report.
On H&R Block Canada
1. Sign up or log in to your H&R Block Canada account and select “Start a new 2024 return”. If you are filing for a previous tax year, select the “See all available years” option that is located below the Account section.
2. If you are completing a tax return for the 2024 year, complete sections 1 through 5 of the “Tell us about your 2024 tax year”.
Note that if you determined the disposition of your crypto assets were on account of business income you may want to select “Self-employed, business, professional or commission income and expenses”, located in section 1 “Employment Income and Expenses”. Otherwise, the following instructions will only cover the steps on how to file crypto taxes with H&R Block Canada as individual crypto holder. You will need to fill out the rest of your tax return as it pertains to your personal circumstances.
When completing section 6 “Investment Income and Expenses”, select the option “Dividend income, Interest earned; sales of stocks, stock options, cryptocurrency”. Be sure to select any other options in this section that may be applicable to your circumstances.
You will be prompted to select which package to use. Choose the “Premier” option which allows you to claim capital gains and losses. If you also have self-employment income, or if you determined that the dispositions of your crypto assets were on account of business income, the “Self-Employed” package further allows you to claim self-employed income and expenses.
3. In the “Credits and Deductions” section is where you will claim your gain (loss) related to the dispositions of your crypto assets that were determined to be on account of capital. When completing the “Credits and Deductions” section of the return you will be prompted to select topics that apply to your situation.
Select “Investment income & expenses”.
Note that if you determined that the disposition of your crypto assets were on account of business income you will want to select “self-employed income & expenses”.
If you have other investments that relate to your personal circumstances select those as well and then select “Add (X) selected topics to my return”.
4. Continue to fill out your return as it pertains to your personal circumstances until you reach the page that is titled “Pension Plans and Investments”.
On this page you will want to select “Capital gains (or losses) in 2024 (Schedule 3)” which is located under the heading “Bought/Sold Securities or Other Property”. You may also select any other options on this page as they relate to your personal circumstances. When all relevant options have been selected, click “Continue”.
5. Continue to fill out your return as it pertains to your personal circumstances until you reach the Schedule 3 Capital gains (or losses) page. Select “Virtual Currency Transactions (cryptocurrency, token, etc.)” from the drop down menu beside “Choose the type of capital property you need to report on.” The capital property page will then be generated.
Not all fields on this form need to be completed. Depending on your personal circumstances you may be able to fill out additional fields in the schedule 3; however, the following fields must be completed:
・How much did you receive from the sale? (proceeds of disposition)
Enter the amount identified in Line 1 from your generated cryptact Summary Report (Proceeds from sales).
・What’s the adjusted cost base? (the cost of this virtual currency and the expenses you had to acquire it)
Enter the amount identified in Line 2 from your generated cryptact Summary Report [Acquisition costs (Adjusted cost basis)].
・What expenses did you have to pay to sell it?
Enter the amount identified on expense section from your generated cryptact Summary Report (Total).
If the amount on Line 5 is showing as $0.00, you may leave this field blank. Note that for here, enter expense only related to capital gains.
On H&R Block
On cryptact summary report
As of the time this article was written, H&R Block requires capital gains/loss for the 2024 tax year to be entered separately for periods before and after June 25. However, since no legislation affecting tax treatment was enacted around this date for the current year, this article does not provide guidance on filing separately for periods before and after June 25.
6. You have finished reporting your crypto asset dispositions that were made on account of capital. Continue to complete the rest of your return as it pertains to your personal circumstances.
Additional Information(Capital loss, other income, business income etc)
What happens if your crypto asset dispositions resulted in a capital loss?
You are allowed to deduct half of your capital losses (known as allowable capital losses), but only against your taxable capital gains. You cannot deduct your allowable capital losses against income from other sources, such as employment income. If you do not have any taxable capital gains to report (or if your allowable capital losses exceed your taxable capital gains), your allowable capital losses may be carried back three taxation years or carried forward indefinitely to offset capital gains of other years.
Where does income earned from cryptocurrency mining, bonus get reported?
Cryptocurrency mining may have tax implications. The income tax treatment for cryptocurrency miners is different depending on whether your mining activities are a personal activity or a business activity. This is decided on a case-by-case basis. If your cryptact Summary Report shows an amount under “Mining” or “Bonus” and you determined that this income was not earned on account of business income, you may be able to include this income as “Other Income” on your tax return. For income from staking or lending on an exchange, these may be able to include “Other Income” as well. If you are unsure about which category your income falls into, we recommend consulting a tax professional.
To do this you must select “Other income earned or received in 2024” under the “Other expenses, deductions, and credits” section of your return.
On the “Other Income” page, you can enter your mining income under “How much income did you earn or receive in 2024 that hasn’t been entered anywhere else in your return?”
In addition, if you have expense related to other income, the claim falls under the “Statement of investment income, carrying charges, and interest expenses page”. You can find this page on the Pension contributions & expense page, under Investments, on the Credits & deductions tab.
On “Carrying charges, interest paid, and other expenses” section, put the amount on “How much did you pay for other expenses?”.
What is the difference between business income (loss) and a capital gain (loss)?
When you dispose of a crypto-asset, the resulting gain (or loss) may be considered as business income (or business loss) or a capital gain (or a capital loss).
You are generally considered to be carrying on a business if you are disposing of crypto-assets in a way capable of producing gains, with that object in view, and the transactions are carried out in a manner similar to a trader or dealer in securities. The following factors may indicate that you are carrying on a business:
1. Frequency of transactions – you have a history of extensive buying and selling of crypto-assets
2. Period of ownership – you hold your crypto-assets for a short period of time, and you turn them over quickly
3. Knowledge of crypto-asset markets – you have knowledge of, or experience in, crypto-asset markets
4. Time spent – you spend a substantial part of your time studying crypto-asset markets
5. Financing – you finance your crypto-asset purchases by some form of debt
6. Advertising – you advertise that you are willing to buy crypto-assets
Although none of the individual factors above may be enough to characterize your activities as a business, the combination of a number of those factors may well be enough. Whether you are carrying on a business or not must be determined case by case. You are generally considered to be carrying on a business if you conduct business activities with regularity or continuity. However, even an isolated crypto-asset transaction could be on account of business income when it is considered “an adventure or concern in the nature of trade.” For more information on the differences between business income and capital gains, please refer to
Information for crypto-asset users and tax professionals - Canada.ca
Ultimately, if a crypto-asset transaction was not made on account of business income, it would generally be considered capital in nature. If you are still unsure of whether the disposition(s) of your crypto assets were on account of business or capital, H&R Block offers an additional service to connect with a Tax Expert who can help you decide.
Summary
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