CA Crypto Tax

Canada Crypto Tax -- Capital Gains & Business Income Skill v1.0

Verified rates & thresholds (accountant-reviewed)

Reviewed against the cited tax authorities by Nathan Wiebe on 2026-06-21. Items flagged for further clarification are tracked separately and excluded here.

Crypto Tax (CA)

• CRA treatment — Commodity (not currency) (CRA — Cryptocurrency and your income tax obligations — canada.ca)
• Cost basis method — Weighted average cost (mandatory under ITA s.47) (ITA s.47; CRA — Adjusted cost base (ACB) — canada.ca)
• First $250K of net gains — 50% inclusion — applies to ALL net capital gains; there is no $250K breakpoint (the proposed 66.67% increase was cancelled March 21, 2025) (ITA s.38(a); CRA — Capital gains — canada.ca)
• Above $250K — 50% inclusion — same rate as below $250K; the proposed 66.67% increase was cancelled March 21, 2025 and Budget 2025 confirmed the cancellation (PM Carney announcement March 21, 2025 (pmc.gc.ca); Budget 2025 (canada.ca); CRA — Cancellation of proposed capital gains inclusion rate increase — canada.ca)
• Corporations/trusts — The 66.67% rate for corporations/trusts was also CANCELLED. The 50% inclusion rate applies to all capital gains for corporations and most trusts in 2025. Change to: '50% on all gains — the proposed 66.67% rate was cancelled.' (PM Carney announcement March 21, 2025; Budget 2025 (canada.ca); CRA capital gains cancellation notice)
• Sell for fiat — YES — disposition (CRA — crypto guidance; ITA s.39)
• Crypto-to-crypto swap — YES — barter transaction (CRA — crypto guidance; ITA s.39)
• Purchase goods/services — YES — at FMV (CRA — crypto guidance)
• Gift crypto — Deemed disposition at FMV — except a transfer to a spouse/common-law partner (or qualifying spousal trust), which rolls over at ACB unless the taxpayer elects out (ITA s.73) (ITA s.69(1)(b))
• Transfer between own wallets — NO — same beneficial owner (CRA — crypto guidance)
• Death — Deemed disposition at FMV (s.70(5)) — except a rollover to a surviving spouse/common-law partner or qualifying spousal trust, which defers the gain (s.70(6)) (ITA s.70(5))
• Window — 30 days before to 30 days after the disposition — AND you or an affiliated person must still own (or have a right to acquire) the same or identical property at the end of that period (s.54; loss denied under s.40(2)(g)(i)) (ITA s.40(2)(g); ITA s.54 (definition of superficial loss))
• Effect — Loss denied; added to ACB of repurchased property (ITA s.53(1)(f))
• Staking — active business — T2125 business income at FMV (ITA s.9; CRA — crypto guidance)
• Staking — passive — Commonly other income (line 13000) at FMV when received, but CRA has issued no definitive staking guidance — characterization and timing are facts-dependent and can be business income (ITA s.12(1)(c); CRA — crypto guidance)
• Mining — business scale — Business income at FMV; expenses deductible (ITA s.9; CRA — crypto guidance)
• Mining — hobby — $0 ACB; CGT on disposition (CRA — crypto guidance)
• Buying/selling crypto for fiat — No GST/HST for a 'virtual payment instrument' (BTC/ETH-type; exempt financial instrument under the ETA since 2021); utility or security tokens failing the VPI definition can be taxable supplies — analyse the token type (ETA Schedule V Part VII (financial services); CRA — GST/HST and cryptocurrency)
• Using crypto to buy taxable goods — GST/HST applies to the goods (ETA s.153; CRA — GST/HST and cryptocurrency)
• Period — 6 years from end of tax year (ITA s.230(4))

Section 1 -- Quick Reference

Section 1 -- Quick Reference

Field	Value
Country	Canada
Tax	Income Tax -- Cryptocurrency / Digital Assets
Currency	CAD (all gains/income reported in CAD)
Tax year	1 January -- 31 December 2025
Primary legislation	Income Tax Act (Canada), Sections 3, 9, 38, 39, 54
Supporting guidance	CRA Guide T4037 (Capital Gains); IT-479R (archived -- Transactions in Securities); CRA crypto guidance page
Tax authority	Canada Revenue Agency (CRA)
Filing portal	CRA My Account / NETFILE / paper T1
Filing deadline	30 April 2026 (15 June 2026 if self-employed; balance due 30 April)
Skill version	1.0

Core Principle

• Core Principle — The CRA treats cryptocurrency as a commodity (not currency). Dispositions result in either a capital gain or business income depending on the taxpayer's circumstances.

Capital Gains Inclusion Rate (2025)

Capital Gains Inclusion Rate (2025)

Taxpayer	Inclusion Rate	Notes
Individuals -- first $250,000 of net capital gains	50%	Standard inclusion
Individuals -- gains above $250,000	50%	Same rate as first $250K; the proposed 66.67% increase was cancelled March 21, 2025
Corporations and trusts	50% on all gains	The proposed 66.67% rate was cancelled March 21, 2025

Important: The proposed increase to 66.67% above $250K was cancelled March 21, 2025 (confirmed in Budget 2025). The 50% inclusion rate applies to all net capital gains for individuals in 2025 — no $250K threshold distinction.

Federal Tax Rates (2025)

Federal Tax Rates (2025)

Taxable Income (CAD)	Rate
0 -- 57,375	15%
57,376 -- 114,750	20.5%
114,751 -- 158,468	26%
158,469 -- 220,000	29%
220,001+	33%

Conservative Defaults

Conservative Defaults

Ambiguity	Default
Unknown whether capital or business income	Treat as capital gains (lower inclusion) until evidence of business activity
Unknown ACB	$0 (maximum gain) -- obtain records
Unknown acquisition date	No holding period benefit claimed
Unknown fair market value at acquisition	Use reputable exchange rate at date/time

Section 2 -- Classification Rules

2.1 Capital Gains vs Business Income

2.1 Capital Gains vs Business Income

Factor	Capital (Investor)	Business Income (Trader)
Frequency of transactions	Occasional	High volume, systematic
Holding period	Extended (weeks/months/years)	Very short (minutes/hours/days)
Knowledge/expertise	General interest	Deep market knowledge, technical analysis
Time devoted	Part-time/casual	Significant daily commitment
Financing	Own capital	Leveraged/borrowed funds
Advertising/promotion	None	May promote activity
Nature of assets	Long-term hold for appreciation	Quick turnover for profit
Tax treatment	50% inclusion	100% income (fully taxable)
Loss treatment	Capital losses (only offset gains)	Business losses (offset all income)

The CRA applies a holistic test. No single factor is determinative.

2.2 Disposition Events

A disposition occurs when:

2.2 Disposition Events

Event	Disposition?
Sell crypto for CAD (or fiat)	Yes
Trade crypto for another crypto	Yes -- barter transaction
Use crypto to purchase goods/services	Yes -- at FMV
Gift crypto	Yes -- FMV (spousal transfers roll over at ACB unless elected out)
Donate crypto to registered charity	Yes -- but donation receipt at FMV; no capital gain if donated to qualified donee (proposed)
Transfer between own wallets	No -- same beneficial owner
Death of taxpayer	Yes -- FMV (spousal/spousal-trust rollover defers the gain, s.70(6))

2.3 Adjusted Cost Base (ACB) Tracking

• ACB calculation method — The ACB is calculated using the weighted average cost method (mandatory for identical properties under ITA s. 47). (ITA s. 47)
• ACB per unit — ACB per unit = Total cost of all units acquired ÷ Total units held (ITA s. 47)

Elements included in ACB

Element Included in ACB	Example
Purchase price in CAD	Amount paid on exchange
Transaction/exchange fees on purchase	Coinbase fee, spread cost
Transfer fees (incoming)	Network/gas fees to acquire

• Partial disposition calculation — When a partial disposition occurs: - Proceeds of disposition = FMV in CAD at time of sale - ACB of disposed units = (Total ACB ÷ total units) × units sold - Capital gain/loss = Proceeds − ACB of disposed units − disposition costs

2.4 Superficial Loss Rule (ITA s. 40(2)(g)(i))

• Superficial loss rule — If you sell crypto at a loss and repurchase the same crypto (or identical property) within 30 days before or after the sale (or your affiliated person acquires it), the loss is denied. The denied loss is added to the ACB of the repurchased property. (ITA s. 40(2)(g)(i))

2.5 Staking Rewards

2.5 Staking Rewards

Treatment	Detail
CRA position	Business income or property income (assessable when received)
Amount	FMV in CAD at date/time of receipt
ACB of received tokens	FMV at receipt (becomes cost base for future disposition)
If part of active business	Report on T2125 (business income)
If passive/property income	Report as other income (Line 13000)

2.6 Mining

2.6 Mining

Scenario	Treatment
Hobby mining (small-scale, no profit intent)	Acquired at $0 ACB; CGT on disposition
Business mining (significant operations)	Business income at FMV when mined; expenses deductible; GST/HST registrant obligations

2.7 Airdrops and Hard Forks

2.7 Airdrops and Hard Forks

Type	Treatment
Airdrop (no consideration given)	CRA: income at FMV if received for services or as reward; otherwise $0 ACB
Hard fork (new token from existing chain)	$0 ACB; taxable on disposition
Airdrop requiring action (governance, claim)	Income at FMV if value exists

2.8 GST/HST on Crypto

2.8 GST/HST on Crypto

Transaction	GST/HST Implication
Purchasing crypto with fiat	No GST/HST (financial instrument)
Selling crypto for fiat	No GST/HST
Using crypto to purchase taxable goods/services	GST/HST applies to the goods/services (crypto is consideration)
Mining/staking as business -- selling mined crypto	Exempt financial service (no GST/HST on sale of crypto itself)
Mining/staking as business -- input costs	ITC may be restricted (financial services supplier rules)
Crypto exchange services (platform fees)	Subject to GST/HST as a taxable supply

Section 3 -- Transaction Pattern Library

3.1 Common Exchange Patterns (Canadian Exchanges)

3.1 Common Exchange Patterns (Canadian Exchanges)

Pattern	Treatment	Notes
NEWTON BUY / SHAKEPAY BUY	Acquisition	ACB = CAD paid + spread (no explicit fee on some platforms)
BITBUY PURCHASE / COINSMART BUY	Acquisition	ACB = CAD paid + any trading fee
KRAKEN BUY (CAD pair)	Acquisition	ACB = CAD equivalent + fee
WEALTHSIMPLE CRYPTO BUY	Acquisition	ACB = CAD paid + spread
SELL ORDER (any exchange)	Disposition	Proceeds = CAD received
CONVERT / SWAP / TRADE	Disposition + acquisition	Two legs: dispose of A, acquire B
CAD WITHDRAWAL	Not taxable	Already sold
CAD DEPOSIT	Not taxable	Funding account

3.2 Income Events

3.2 Income Events

Pattern	Treatment	Notes
STAKING REWARD	Income (business or property)	FMV at receipt
MINING PAYOUT	Income (if business) or $0 ACB (if hobby)	Determine mining scale
REFERRAL BONUS (crypto)	Income	FMV at receipt
EARN / LENDING INTEREST	Income (property income)	FMV at receipt
CASHBACK REWARD (crypto)	Income	FMV at receipt

3.3 Non-Taxable Movements

3.3 Non-Taxable Movements

Pattern	Treatment	Notes
TRANSFER TO COLD WALLET	No tax event	Same beneficial owner
TRANSFER BETWEEN EXCHANGES	No tax event	Network fees add to ACB or deductible expense
FIAT DEPOSIT / WITHDRAWAL	No tax event	Cash movement

Section 4 -- Computation Method

Step 1: Classify Activity

• Step 1 — Determine if taxpayer is investor (capital gains) or trader (business income).

Step 2: Build ACB Ledger

• Step 2 — Track every acquisition: weighted average cost across all units of each crypto.

Step 3: Calculate Gain/Loss per Disposition

• Step 3 — Proceeds (CAD FMV) − ACB of disposed units − selling costs = gain or loss.

Step 4: Check Superficial Loss Rule

• Step 4 — Deny any loss where you or an affiliated person reacquired the same crypto within the 30-day window and still hold it at the end of that period.

Step 5: Apply Inclusion Rate

• Step 5 — - Capital gains: 50% on all net capital gains (individuals) — the proposed 66.67% rate above $250K was cancelled March 21, 2025 - Business income: 100% taxable

Step 6: Report Staking/Mining/Airdrop Income

• Step 6 — Separately from capital gains -- as business or property income.

Step 7: File

• Step 7 — - Capital gains: Schedule 3 - Business income: T2125 (Statement of Business Activities) - Other income: Line 13000

Section 5 -- Record-Keeping Requirements

CRA requires:

Section 5 -- Record-Keeping Requirements

Record	Mandatory
Date and time of each transaction	Yes
Type of transaction (buy/sell/trade/transfer)	Yes
Amount of crypto involved	Yes
FMV in CAD at time of transaction	Yes
Exchange or platform used	Yes
Wallet addresses involved	Yes
Running ACB calculation	Yes
Purpose of transaction	Yes

• Retention — 6 years from the end of the tax year to which they relate.

Section 6 -- Edge Cases

6.1 Crypto-to-Crypto Swaps

• Crypto-to-Crypto Swaps — Each swap is a barter transaction. The disposition of crypto A is at the FMV of crypto B received (or FMV of A given up, whichever is more readily determinable). Must calculate gain/loss on A and establish ACB for B.

6.2 DeFi Lending

• DeFi Lending — Lending crypto to a DeFi protocol may be a disposition (if legal ownership transfers to the protocol). Conservative treatment: disposition at FMV when deposited, reacquisition when withdrawn. Interest/yield received is property income.

6.3 NFTs

• NFTs — Treated the same as other crypto assets. Acquisition = ACB. Sale = disposition. If creating NFTs as a business, profits are business income.

6.4 Wrapped Tokens

• Wrapped Tokens — Wrapping (e.g., ETH → WETH) is a grey area. Conservative treatment: disposition of ETH, acquisition of WETH at same FMV. No gain/loss but must track separately.

6.5 Emigration from Canada

• Emigration from Canada — Deemed disposition of all crypto at FMV on departure date. Capital gains tax applies on departure. (ITA s. 128.1)

6.6 Death

• Death — Deemed disposition at FMV immediately before death (s.70(5)); capital gains included in the terminal return and the beneficiary acquires at FMV as their ACB. A rollover to a surviving spouse/common-law partner or qualifying spousal trust defers the gain (s.70(6)).

Section 7 -- Prohibitions

• Prohibitions — - NEVER apply a higher inclusion rate than 50% — the proposed 66.67% rate above $250K was cancelled March 21, 2025; 50% applies to all gains in 2025 - NEVER use specific identification method for identical properties -- CRA requires weighted average (ITA s. 47) - NEVER ignore the superficial loss rule for repurchases within 30 days - NEVER treat crypto-to-crypto swaps as non-events -- each swap is a disposition - NEVER claim business losses without substantiating that the activity is a business (not capital) - NEVER ignore GST/HST obligations for crypto businesses - NEVER assume airdrops are always tax-free -- determine if income character exists - NEVER omit staking/mining income -- it is taxable when received - NEVER present tax calculations as definitive -- always label as estimated

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