Crypto Tax Canada 2026

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Cryptocurrency is not a tax-free investment in Canada. CRA treats crypto as a commodity, which means every time you sell, trade, or spend crypto, you have a taxable event. With CRA actively matching exchange records to tax returns, unreported crypto gains are one of the fastest-growing sources of tax reassessments in Canada.

How CRA Classifies Crypto Income

CRA uses one of two treatments for crypto gains depending on your activity level:

Treatment	When It Applies	Tax Impact
Capital gain	Occasional buying and selling as an investment	Only 50% of the gain is taxable (2/3 for gains over $250,000 in 2025+)
Business income	Frequent trading, day trading, treated as a business	100% of profit is taxable as regular income

CRA looks at factors like frequency of transactions, holding period, knowledge of crypto markets, and whether you are organized like a business to decide which applies. Most casual investors are taxed as capital gains. Active day traders are typically taxed as business income.

What Triggers a Taxable Event

A taxable event happens every time you:

• Sell crypto for Canadian dollars (or any fiat currency)
• Trade one crypto for another — e.g., swapping Bitcoin for Ethereum is a disposition of Bitcoin at its fair market value at the time of the swap
• Use crypto to buy goods or services — spending crypto is treated as selling it
• Give crypto as a gift — you are deemed to have disposed of it at fair market value
• Receive crypto as payment for work — this is employment or business income, not a capital gain
• Receive staking rewards or mining income — taxed as business income at the fair market value when received

What does NOT trigger a taxable event

• Buying crypto with Canadian dollars — no tax event until you sell
• Moving crypto between your own wallets
• Holding crypto — unrealized gains are not taxed

How to Calculate Your Capital Gain or Loss

The formula is straightforward:

Capital Gain = Proceeds of Disposition − Adjusted Cost Base (ACB) − Transaction Fees

• Proceeds of disposition — the fair market value (in CAD) of what you received when you sold or traded
• Adjusted Cost Base (ACB) — your original cost in CAD, including fees paid to purchase
• Transaction fees — exchange fees are deductible from the gain

Example

You bought 1 Bitcoin for $30,000 CAD (including fees). You sold it in 2025 for $65,000 CAD with a $50 selling fee.

• Proceeds: $65,000
• ACB: $30,000
• Fees: $50
• Capital gain: $65,000 − $30,000 − $50 = $34,950
• Taxable amount (50% inclusion): $17,475
• At 33% marginal rate: approximately $5,767 in tax

The Adjusted Cost Base Problem

If you bought the same crypto at different prices over time, you must use the average cost method (not FIFO). Every new purchase changes your ACB for all units of that crypto.

Example: You bought 1 ETH at $2,000, then 1 more ETH at $3,000. Your ACB is ($2,000 + $3,000) / 2 = $2,500 per ETH. If you sell 1 ETH for $4,000, your gain is $4,000 − $2,500 = $1,500.

Capital Gains Inclusion Rate in 2025–2026

The federal government changed the inclusion rate for large capital gains starting June 25, 2025:

Annual Capital Gains	Inclusion Rate	What Gets Taxed
First $250,000 (individuals)	50%	Half the gain added to income
Above $250,000 (individuals)	66.67%	Two-thirds of the gain added to income
Corporations and trusts (all gains)	66.67%	Two-thirds of the gain added to income

This primarily affects high-volume crypto investors or those who had large gains from a single event (e.g., selling a large Bitcoin position).

How to Report Crypto on Your Tax Return

Crypto gains and losses are reported on Schedule 3 — Capital Gains (or Losses) of your T1 return. In tax software, there is usually a "Cryptocurrency" category under investments.

For business income from crypto (trading, mining, staking), report on Form T2125 — Statement of Business or Professional Activities.

Records You Must Keep

CRA requires you to keep records for at least 6 years. For crypto, this means:

• Date of every transaction
• Type of crypto (Bitcoin, Ethereum, etc.)
• Amount purchased or sold in CAD at the time of the transaction
• Transaction fees paid
• Wallet addresses used
• Exchange statements and receipts

Crypto Losses — The Silver Lining

Capital losses from crypto can be used to offset capital gains — including gains from stocks, real estate, or other crypto. If your losses exceed your gains in a year, you can:

• Carry the loss back up to 3 years to offset past gains
• Carry the loss forward indefinitely to offset future gains

This makes losing trades useful — they reduce your tax bill in profitable years.

NFTs, DeFi, and Staking

NFTs

Selling an NFT for more than you paid is a capital gain. Creating and selling NFTs is typically business income.

DeFi and liquidity pools

Adding crypto to a liquidity pool may be treated as a disposition. Swapping tokens within DeFi protocols triggers capital gains. CRA has not issued specific DeFi guidance — most accountants take a conservative approach and treat each swap as a taxable event.

Staking and mining rewards

Rewards received from staking or mining are taxed as business income at their CAD fair market value on the day you receive them. When you later sell those tokens, the gain or loss is calculated from that same receipt value.