Hi! I am a Canadian tax attorney assisting many clients with their cryptoassets reporting. One form for which Canadians badly need Koinly's team help to be able to properly file it is Form T1135 - Foreign Income Verification Statement. It's been requested a few times throughout the years already. This form can be pretty complicated, but one thing that has not been mentioned is that it offers in some cases a "Simplified Reporting Method". Assuming no other specified foreign property other than cryptoassets are owned by a Canadian taxpayer, there is no need to file Form T1135 for a given year if the total cost of all cryptoassets held outside Canada is below CAD $100,000 throughout the year. If the total cost is between CAD $100,000 and $250,000, then the "Simplified Reporting Method" can be used and could be relatively easily implemented by Koinly considering that all the data is already available. That could be a first EXCELLENT and simpler step towards one day allowing Koinly users to manage the "Detailed Reporting Method" through Koinly. That being said, I would assume that most Canadians users are below the CAD $250,000 mark, so, again, that would be an excellent step. Here is how to implement it: On the wallet page, a Canadian user can tag a wallet as being "Funds held outside Canada". That could apply for example to a Kucoin wallet. Once a wallet is tagged as "Funds held outside Canada", user need to indicate the country or, if unknown, user needs to indicate OTH (which stands for Other). For the list of country codes, Koinly dev team can refer to the Canada Revenue Agency publication T4061 entitled NR4 – Non-Resident Tax Withholding, Remitting and Reporting Guide, Appendix A. A new report should be made available to Canadians, here is what it should contain: 3A. Total cost of all cryptoassets held in wallets tagged as "Funds held outside of Canada" for each day of the year (so a 365 or 366 lines list with the total cost at each end of day). Above the list should be indicated the day having the highest total cost and the total cost for that day (example: January 4, 2024 - Total cost CAD $145,493). That will allow the user to know if he needs to file a form T1135 or not (i.e. of max total is above or below 100K). If cost is between 100K and 250K, user will know that it can use the Simplified Reporting Method. 3B. Canadian taxpayers need to report the Top 3 Countries in which specified foreign property was held during the year. So next page of the report should be silimar to 3A above, but instead of reporting the total cost of all wallets each day, it needs to be done on a per country basis. The 3 countries with the highest cost balance at any point during the year should be shown on top of that page. 3C. Canadian taxpayers need to report gross income from all specified foreign property. That could be done by showing the total income (other income, realized PNL, staking, etc.) realized in the wallets tagged as "Funds held outside Canada". 3D. Similarly, Canadian taxpayers need to report net capital gains or loss from specified foreign property. That'd be similir to the capital gains report, but taking into acount onlly the wallets tagged as "Funds held outsise Canada". With that, Koinly can assist Canadian taxpayers having a cost basis up to $CAD 250,000 on (mainly) foreign centralized crypto exchanges. Thanks for your consideration.
