The CRA concludes:
Whether a particular activity is undertaken for profit is a question of fact that can only be determined on a case-by-case basis.
In effect, this will mean that those investing in bitcoin as a business, those using it as an alternative currency, those mining it and those accepting it for commercial reasons will all be subject to slightly different tax rules. In each case, the value of the coins will be determined using a fair market value, and losses through risk, theft or embezzlement are deductible. Bitcoin used for personal bartering purposes are subject to taxation as income. Bitcoin gifts, however, are not subject to taxation.
The guidance comes as a response to bitcoin-related tax questions posed to the CRA in January. Although the rules were drafted in late March, the CRA only published the new guidelines last week. Given the semi-anonymous nature of bitoin, it remains unclear how the CRA would track many such transactions, or determine what category each transaction belongs to.