Need some assistance here on Crypto! Only one client trades this and apparently not very actively, although the report from Koinly says ~300 “transactions”.
The report provides a summary (and details elsewhere) of Acquisitions, Proceeds and total gains, total losses and obviously the net of the two. Allegedly Capital Gains (more about this in a bit).
As well, there is also income from “Mining” and “Reward” (I assume these are both Foreign Income) and some minor expenses.
Following that is a billion pages of detail.
The client tells me he is not “active” in trading, but 300 “transactions” seems like…maybe a lot? Most of these appear to be simply moving assets from somewhere to somewhere else and as such are really one trade per day on average through the year.
My inclination is at least this year to report trades on Capital Account and report the remainder (mining/reward) as Foreign Income in full.
Any advice if I’m on the right track here…first real experience with this!
If he download csv transaction history from koinly then he can check on excel how many of those are trades vs transactions like withdrawal, deposits, and transfers if he label them correctly. Cuz Koinly don’t really import each platform records like magic as someone new might think. Chances are there will be errors to fix all the time the more trades there are.
If he import order history from crypto exchange it would show less trades than trade history because 1 order could be split into 5 trades in 0.003 milliseconds because of liquidity, like 1 buy order could be split into 5 buy trades in few milliseconds from 5 different sellers. If CRA doesn’t understand that, they could potentially treat it as business income, showing more trades then he actually took.
Another thing that might be adding to their transaction numbers are scam transactions. I can’t speak for all wallets but my wallets seem to have been flagged by scammers. Any time I do a transaction there are 1-5 scam transactions that follow (they send you fake coins or small amounts of real coins hoping you accidentally use their wallet or interact with their scam coins). But this is using a self custodial wallet such as Metamask as opposed to a centralized exchange such as Binance or Coinbase.