Capital Gains Tax on Crypto in Canada (2025)
The CRA's position on cryptocurrency has been consistent since 2013: crypto is treated as a commodity, not currency, for Canadian tax purposes. Every time you dispose of crypto — selling, trading, spending, or gifting it — you have a taxable event.
Capital gains vs. business income
The biggest tax distinction for crypto investors is whether your activity produces capital gains (50% included) or business income (100% included).
Capital gains treatment applies if you are holding crypto as a long-term investment and selling occasionally. Only 50% of your gain is taxable.
Business income treatment applies if your crypto activity looks like a business:
- High frequency of transactions
- Short holding periods
- Professional-grade tools and strategy
- You're trading for a living
Business income is taxed the same as employment income — fully taxable at your marginal rate, with no 50% inclusion rate benefit. The CRA looks at the totality of your activity to make this determination. If you're unsure, document your investment intent.
Mining and staking typically produce business income (if done at scale) or income from property (for small-scale staking), taxed as ordinary income in the year received.
Every disposal is a taxable event
Unlike some other tax systems, Canada has no concept of "buy and hold until you cash out to fiat." Any of the following triggers a capital gain or loss:
- Selling crypto for Canadian or US dollars
- Trading one crypto for another (e.g., ETH for BTC) — you disposed of ETH at fair market value
- Spending crypto to buy goods or services
- Gifting crypto (deemed disposed at fair market value)
- Transferring crypto to a DeFi protocol or liquidity pool (depending on structure)
Simply moving crypto between wallets you own is not a taxable event — as long as ownership doesn't change.
ACB for crypto — the identical properties rule
Crypto assets of the same type are identical properties under the CRA's rules. Just like stocks, you must use a weighted average ACB across all of your holdings of that crypto.
If you bought 1 BTC at $40,000 and another 1 BTC at $60,000, your ACB is $50,000 per coin — not $40,000 or $60,000. When you sell 0.5 BTC, the ACB is 0.5 × $50,000 = $25,000.
This makes tracking individual DeFi transactions and multiple purchases essential. Keep records of:
- Date of each acquisition
- Amount paid (in CAD at the time)
- Exchange fees
- Date and proceeds of each disposal (in CAD at the time)
Use the ACB calculator to track your weighted average ACB across multiple purchases.
Schedule 3 — Line 7 for crypto
Since 2021, Schedule 3 has a dedicated Line 7 for crypto-assets. Report all your crypto capital gains and losses on this line. Failing to report is not an option — the CRA has been issuing information requests to Canadian crypto exchanges and has data-sharing agreements with international partners.
Foreign exchange conversion
All amounts must be reported in Canadian dollars. If you bought Bitcoin in USD on a US exchange, convert the USD price to CAD using the exchange rate on the transaction date. The Bank of Canada's published exchange rates or the CRA's annual average rate (if transactions are numerous) are both acceptable.
NFTs
Non-fungible tokens (NFTs) are generally treated as capital property. Creating an NFT for sale may be treated as business income if done commercially. Selling an NFT you purchased as an investment is typically a capital gain (or loss).
The superficial loss rule applies to crypto
If you sell Bitcoin at a loss and immediately rebuy, the CRA's superficial loss rule may deny the loss. The same 30-day window applies. The denied loss is added to the ACB of the repurchased coins.
Record-keeping
The CRA requires you to keep records of all crypto transactions for a minimum of 6 years. With DeFi activity, swaps, and on-chain transactions, this can be complex. Consider using a crypto tax tracking tool and exporting your transaction history from all exchanges annually.
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