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I bought 2 BTC in 2019 for $4,000 each

I bought another 2 BTC in 2020 for $10,000 each

In total, I bought 4 BTC for $28,000

I sold 1 BTC in 2021 for $40,000

How do I calculate the capital gain for the 1 BTC I sold in 2021, since I bought BTC at different prices? I live in Quebec, Canada.

1 Answer 1

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In Canada, capital gains are calculated using an adjusted cost base (ACB). The ACB is the weighted average cost of the Bitcoins, including any transaction fees or commissions.

Assuming that all the costs in your question include transaction fees and commissions, then the weighted average cost of your Bitcoins is:

[(2 BTC * $4,000) + (2 BTC * $10,000) + (4 BTC * $28,000)] / (2 BTC + 2 BTC + 4 BTC) = $17,500

You sold 1 BTC for $40,000, so:

Capital gain = $40,000 - $17,500 = $22,500


I hope you are aware that gains from Bitcoins are not always considered capital gains. Depending on your specific activities, they may be considered business income instead, in which case the calculations above may not apply. Refer to the Guide for cryptocurrency users and tax professionals.

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  • Ok, so I take the average price that I bought BTC at prior to selling it. And if I spend 0.001 BTC on transaction fees to sell it and cash out into my bank account, my capital gain would be $22,500-(0.001*x), where x is the fair market price of BTC at the time of the transaction, right? Sep 14, 2022 at 15:37
  • (by the way, for anyone else reading this, I bought a total of 4 BTC, not 8, so my average buy price is $28,000/4 = $7000, not $17,500, but you get the point) Sep 14, 2022 at 15:37

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