Is a recipient of gifted cryptocurrency subject to Capital Gains if they sell the asset immediately after they received it?

Forum|Forum|2 years ago
March 4, 2024
1 reply
0 views

Here is a fake example which is made up. Let’s say I gift a family member $10,000 worth in Bitcoin. I understand that in Canada gifting crypto is considered a disposition by the CRA so I would pay any capital gains I gained while I held it. And for the recipient, their Fair Market Value would be the day they received it.

So if I gifted them $10,000 in Bitcoin, and they were to sell the Bitcoin for $10,000 immediately after receiving it, I am wondering if they would have to pay any Capital Gains tax.

Moussi2

When you gift, use, sell, or exchange cryptocurrency, it is considered a disposition for tax purposes requiring the reporting of either business income/loss or capital gain/loss, depending on the circumstances. Ultimately, the tax results are very similar if you are holding or trading company shares

As per CRA, for gifts to qualified donees of certain types of capital property, the capital gains inclusion rate is reduced to zero. Please read the full section on the CRA webpage about capital property and capital gains.

Thank you for choosing TurboTax.