Introduction
Bitcoin Cash (BCH) was introduced in 2017 as a hard fork of Bitcoin, aiming to provide faster and cheaper peer-to-peer transactions. While it shares many of Bitcoin’s core features, Bitcoin Cash operates on a separate blockchain and is treated as a distinct digital asset under Canadian tax law.
Whether you acquired BCH through a fork, purchased it directly, or use it for payments, every transaction involving Bitcoin Cash carries potential tax consequences. This article explains how Canadian crypto users should approach BCH under CRA guidance.
Acquiring Bitcoin Cash
If you received BCH as a result of the original Bitcoin fork in 2017, the CRA treats it as a separate asset from the date of the fork. In this case, the adjusted cost base (ACB) for your BCH should be based on its fair market value at the time it was received. This event may not have triggered tax at the time of the fork, but any future sale or use of BCH is taxable.
For users purchasing BCH with fiat, no tax is due at the time of acquisition. However, purchase details — including date, cost, quantity, and any fees — must be recorded to establish the ACB for future tax reporting.
Spending or Selling BCH
Spending Bitcoin Cash — whether for goods, services, or peer-to-peer transfers — is considered a disposition. The CRA requires you to report any capital gain or loss by calculating the difference between the token’s fair market value at the time of disposal and its ACB.
Selling BCH for fiat (e.g., CAD) or trading it for another crypto (e.g., ETH or BTC) also triggers a taxable event. Even if no fiat is involved, these trades must be documented with fair market values at the time of the transaction.
Wallet Transfers and Recordkeeping
Transferring BCH between your own wallets — whether hot, cold, or custodial — is not taxable. However, it’s vital to document these movements to preserve the continuity of your ACB. Incomplete records may lead to errors during tax filing, especially if holdings span multiple wallets or exchanges.
Mining and Other Rewards
While Bitcoin Cash can be mined, it is less common among individual Canadian miners. If you do receive BCH through mining, the CRA treats the value of coins earned as business income at the time they are received. Mining expenses can be deducted, but you must maintain proper receipts and logs.
Additionally, if you earn BCH through affiliate programs, referral bonuses, or crypto platforms, those amounts may also be classified as income, depending on the source and structure.
Forks, Airdrops, and CRA Expectations
If you’ve received BCH or any future forked coins, it’s your responsibility to track the date and value of each asset when credited. Forked coins are typically viewed as new property with their own tax basis, and any future use or sale must be reported separately.
The CRA expects that all such assets — regardless of how they were acquired — be valued appropriately and included in your annual reporting.
Conclusion
Bitcoin Cash may offer faster and cheaper transactions, but under Canadian tax law, it is subject to the same scrutiny as any other digital asset. Accurate tracking, valuation, and reporting are key to staying compliant — especially for users who received BCH through historical forks.
Block3 Finance helps Canadian crypto users and investors report Bitcoin Cash activity with precision. From forked assets to spending records, we ensure your BCH holdings are tax-compliant and audit-ready.
If you have any questions or require further assistance, our team at Block3 Finance can help you.
Please contact us by email at inquiry@block3finance.com or by phone at 1-877-804-1888 to schedule a FREE initial consultation appointment.
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