If I take out of crypto and back into my Canadian fiat CAD (lets say it amounts to $7000 CAD)…do I have to declare that $7000 and pay taxes on it again? I’m asking because it has already been calculated into all the transactions (including converting back to CAD)…has it not?
Canada uses the ACB method (Average Cost Basis) for calculating crypto taxes.
As an example:
I invest $10,000CAD into crypto and value of my crypto climbs to $30,000CAD and I have done several crypto to crypto trades therein but now decide to convert back to CAD the amount of $7000CAD. Since I am being taxed on the amount I hold as well as every taxable event while held in crypto (ie a crypto to crypto trade is a taxable event), is not the act of converting back to CAD also calculated by Koinly and therefore I have already paid (will pay at year end) taxes on that $7000CAD and therefore do not have to declare it?
The taxable event is the selling of crypto to fiat. Moving fiat to your bank account is the same as transferring between your own bank accounts. Not taxable.
That last sentence should read…‘and therefore do not have to declare it because it is technically already declared in the koinly calculations?’