Crypto taxes in Canada: capital gains, income and records

Canadian crypto tax starts with the transaction, not the label on the asset. The Canada Revenue Agency asks whether a crypto-asset was disposed of and, if it was, whether the result belongs on capital account or income account. This guide organizes those questions in the order needed to review a transaction. It is general educational information, not a substitute for advice about an individual return.

Quick decision path

Start with four questions:

1. Did you only transfer the asset between wallets you own? That generally is not a disposition, although the records still matter.
2. Did you sell, swap, spend, gift or otherwise transfer ownership? That can be a disposition requiring a Canadian-dollar calculation.
3. Does the activity resemble investing, or is it organized and carried out like a trading or commercial business? The answer changes whether the result is a capital gain or business income.
4. Can you support the proceeds, adjusted cost base, fees and valuation method with original records?

The CRA decides from the facts. No single label in an exchange account, and no statement that someone is an “investor,” settles the classification.

What can count as a crypto disposition

Converting crypto to Canadian dollars is not the only event that matters. CRA guidance identifies several ways a person can dispose of a crypto-asset:

• selling it for government-issued currency;
• exchanging one crypto-asset for another;
• using it to buy goods or services;
• gifting it or otherwise transferring ownership.

Because cryptocurrency is not government-issued currency, paying with it is generally treated as a barter transaction. A BTC-to-ETH swap also needs a Canadian-dollar value even though no dollars entered the exchange account. Moving the same asset between wallets you own is different and generally does not itself create a disposition.

Capital gain or business income

When a disposition occurs, the result can be on capital account or income account. The CRA says business treatment becomes more likely when the conduct is capable of producing gains, is undertaken with that objective and resembles the activity of a trader or dealer. Relevant facts can include transaction frequency, holding period, knowledge, organization, time devoted and financing.

An occasional long-term holding can point toward capital treatment. Frequent, organized short-term trading can point toward business income. Those are indicators, not automatic tests. A taxpayer can also have different crypto holdings with different purposes, provided the facts and records support that treatment.

For business income, the full net profit is reported as business income and inventory rules may apply. For a capital disposition, the capital gain or loss is calculated first and the applicable inclusion rules are then used for the relevant tax year. The CRA’s crypto guidance updated in December 2025 states that half of a capital gain is included in income. Tax legislation and administration can change, so confirm the applicable inclusion rate for the year being filed instead of relying on an older article or calculator.

How a capital gain is calculated

The basic calculation is:

Proceeds of disposition − adjusted cost base − eligible disposition costs = capital gain or loss

Proceeds are usually the Canadian-dollar value received when the asset is disposed of. Adjusted cost base, or ACB, generally begins with the Canadian-dollar acquisition cost plus eligible acquisition expenses. Costs directly connected with the disposition can reduce the result where the rules permit.

Worked example: sale for Canadian dollars

Suppose a person acquires crypto for C$6,000, including eligible acquisition costs, and later sells the entire holding for C$8,400 while paying C$100 in disposition costs.

• proceeds: C$8,400
• adjusted cost base: C$6,000
• disposition costs: C$100
• capital gain before the applicable inclusion calculation: C$2,300

This example assumes the transaction is on capital account. If the activity is a business, the accounting and reporting treatment is different.

Worked example: crypto-to-crypto swap

Suppose an asset with an ACB of C$2,000 is exchanged for another crypto-asset worth C$2,700 at that moment. The first asset has been disposed of. Before eligible costs, the gain is C$700. The C$2,700 value also becomes relevant to the acquisition cost of the asset received.

The valuation should come from a reasonable, consistently applied method. Save the rate, source and timestamp used rather than attempting to reconstruct it months later.

Identical assets and pooled cost

Buying the same crypto-asset at several prices normally creates a pooled ACB for identical property. It is not generally possible to select whichever individual coin lot produces the most convenient result.

For a simplified illustration, buying one unit for C$60,000 and another for C$80,000 produces a total cost of C$140,000 across two units, or C$70,000 per unit before additional eligible costs. A later sale reduces the remaining pool. Purchases, dispositions and fees need to be processed in order so the running balance remains accurate.

Records to keep

The CRA says individuals and businesses must keep adequate books and records supporting their crypto transactions. A useful file should include:

• units and type of crypto-asset;
• date and time of each transaction;
• Canadian-dollar value at that time;
• transaction type and the other party or address;
• transaction IDs and wallet addresses;
• beginning and ending balances and costs for each asset;
• exchange trade and transfer ledgers;
• receipts for accounting, legal and eligible software costs;
• the valuation source and method used.

Download original exchange exports regularly. A platform may leave Canada, close or limit how far back its account history can be retrieved. CRA guidance generally requires tax records to be retained for at least six years from the end of the last tax year to which they relate; different facts can affect the exact retention period.

Staking, mining and crypto received for work

Buying and later selling an asset is not the only pattern. Mining, staking and crypto received for goods or services can create income questions when the asset is received. A later sale can then create a separate gain or loss measured from the amount already included in cost.

The result depends on the activity and facts. DeFi deposits, liquidity positions, wrapped assets, lending, airdrops and chain migrations can also be more complex than a simple sale. Do not force those events into the worked examples above without checking their actual legal and beneficial ownership consequences.

Filing checklist

Before filing:

1. reconcile wallet and exchange balances;
2. identify transfers between owned wallets so they are not mistaken for disposals;
3. classify sales, swaps, spending and ownership transfers;
4. calculate Canadian-dollar proceeds, ACB and eligible costs consistently;
5. document why the activity was treated as capital or business;
6. use the forms and inclusion rules for the specific tax year;
7. obtain professional advice where the classification or transaction type is uncertain.

For capital transactions, the CRA’s current Schedule 3 instructions include crypto-assets in the relevant reporting section. Business activity is reported under the applicable business-income rules instead.

What this guide cannot decide

This page cannot determine whether a reader is carrying on a business, whether a particular DeFi action changes beneficial ownership, which expenses are deductible, or how foreign reporting and GST/HST rules apply. Those answers require the complete facts and current law.

Use the linked CRA sources as the starting point and speak with a qualified Canadian tax professional where the amount or classification is material. Keep a copy of the source and rule relied on for the return year, because crypto guidance and tax administration continue to evolve.