Canadian Parliamentarian Dan Albas, has introduced Bill C-452 in Parliament today which would allow holders of cryptocurrency to make charitable donations in crypto to Canadian charities and get a tax credit for their donations.
The short but powerful amendment to the Income Tax Act, amends §38(a.1) to include crypto as an approved category for the purposes of calculating capital gains and allowable capital losses. This means that crypto will be recognized for capital gains purposes for donations to charities for income tax purposes in the same way as shares are.
Currently the Income Tax Act in Canada allows shares, mutual fund units and such to qualify for the purposes of a disposition of gifts to qualified donees but it does not treat digital currencies in the same way as other assets like shares. If Bill C-452 passes, digital currencies like Bitcoin can be gifted to charities in the same way as shares for capital gains purposes.
In essence, the amendment, if passed, means that those Canadians who hold approved digital currencies can support Canadian charities with donations of crypto and take advantage of the Income Tax Act for their generosity.
Bill C-452 went through first reading today when it was released.
Not all digital currencies will be eligible — the government, if the Bill is passed, will list those digital currencies that qualify for gifts to charities for capital gains purposes and it will likely not approve ICOs or digital currencies where there are issues attached to the digital currency, or to the persons behind it to mitigate financial crime concerns.
Dan Albas is the Member of Parliament from British Columbia (Central Okanagan – Similkameen – Nicola) and is the shadow minister for Innovation, Science and Economic Development.