Crypto Taxes Canada

CRA rules, 50% (or 66.67%) inclusion, ACB method, T1135 foreign reporting.

Tax year 2025 · filing year 2026

Reviewed by Stephan Kulik · Last updated: 2026-04-21 · How we rank

Short answer

CRA treats crypto as property. Capital gains: 50% of the gain included in taxable income at your marginal rate (proposed rise to 66.67% above $250k gain/year — verify current status). Business income if high-frequency trading / commercial mining: 100% included. Cost-basis method: ACB (adjusted cost base), running average per asset. T1135 required if foreign crypto holdings > CAD $100,000. Not tax advice — consult a Canadian tax professional.

Classification: capital gains vs business income

The most important question: are you a capital-gains taxpayer (50% inclusion) or a business taxpayer (100% inclusion)? CRA indicators for business classification:

High frequency of trades (daily, many per week)
Professional time commitment
Use of borrowed capital or sophisticated tools
Operating in a business-like manner
Intent to profit (all investors have this, but combined with the above it matters)

Most retail investors holding for months-to-years with occasional sales remain capital-gains. Active day-traders risk reclassification. Mining: hobby-scale mining remains capital-gains on disposal; commercial mining is business income. When uncertain, consult a Canadian tax advisor — the classification has a 2× tax impact.

Capital gains calculation

Gain = proceeds (CAD FMV at disposal) minus adjusted cost base. 50% (or 66.67% above threshold) of that gain is included in taxable income. Example: buy 1 BTC at CAD $50,000, sell at CAD $70,000. Gain = $20,000. Taxable income inclusion = $10,000 at 50%. At a 30% marginal rate, tax owed = $3,000.

Adjusted cost base (ACB)

ACB is Canada\'s running-average method. Each purchase adjusts the average cost per unit. On disposal:

Units being disposed = proceeds / current market price
ACB per unit = total ACB / total units held
Gain = (proceeds - (ACB per unit × units disposed))

After disposal, remaining units keep the same ACB per unit; total ACB reduces proportionally. Tools (Koinly, CoinTracking) automate this. Important: ACB is per-asset. Your BTC ACB is independent of ETH, which is independent of SOL. A crypto-to-crypto swap updates both: disposal on one side, acquisition at new ACB on the other.

Staking, lending, DeFi

Staking rewards: ordinary income at CAD FMV on receipt. Subsequent disposal is a separate capital-gains event on the gain since receipt.
Lending interest (Nexo, Ledn, Crypto.com Earn): ordinary income at receipt.
Airdrops: if claimed via action, income at receipt; if received passively, zero cost basis, full proceeds as capital gain on disposal.
DeFi interactions: each swap, deposit, withdrawal can be a taxable event. Protocols that tokenise your position (Aave → aUSDC) are typically treated as disposal + re-acquisition.

T1135 foreign-holdings declaration

If total cost of your foreign-property holdings (including crypto at non-Canadian exchanges) exceeded CAD $100,000 at any point in the year, you must file T1135 (Foreign Income Verification Statement). Crypto on Canadian-domiciled exchanges (Bitbuy, Newton, Coinsquare, Crypto.com Canada if Canadian branch) does not count toward the threshold. Crypto in self-custody wallets that you control is generally treated as situated where you are resident (Canada), though there\'s some jurisprudence complexity.

Penalties for T1135 non-filing: CAD $25/day up to $2,500 per year, or 5% of the foreign-property cost in certain cases. Worth filing correctly.

Where to report

Schedule 3 (T1): capital gains — each disposal reported, aggregate flows to line 12700.
Schedule T2125 (T1): self-employment / business income — mining as commercial activity, active trading reclassified.
T1135: foreign property verification — if applicable threshold met.
T2 (corporation): if you hold crypto in a corporate vehicle.

The 2024-2025 inclusion-rate change

The 2024 federal budget proposed raising the capital-gains inclusion rate from 50% to 66.67% for individuals with annual gains above CAD $250,000 (and for all corporate gains). Implementation has been politically contested — verify current status for the tax year you\'re filing. Tools with Canadian support reflect the current inclusion rate.

Where to hold crypto from Canada

Canadian-domiciled exchanges (Bitbuy, Newton, Coinsquare, VirgoCX, Crypto.com Canada) simplify reporting — they may provide CRA-compliant tax reports, they don\'t count toward T1135. Global platforms (Coinbase, Kraken, Binance) provide broader access but require T1135 above threshold. See best crypto banks in Canada, Ledn review (Canadian-regulated).

Disclaimer

This page is general information, not tax advice. Canadian tax rules evolve; the 2024-2025 inclusion rate change is an example. Consult a Canadian accountant (CPA) familiar with crypto. See terms.

Frequently asked questions

How does the CRA tax crypto? +

CRA treats crypto as property, not currency. Disposals (sell, swap, spend, gift) are tax events. Two possible classifications: (1) capital gains (typical retail investor) — 50% of the gain included in taxable income at marginal rate, unless CRA reclassifies as business; or (2) business income (high-frequency traders, mining, professional activity) — 100% of income at marginal rate. The 2024-2025 federal budget proposed raising the capital-gains inclusion rate to 66.67% on gains above $250k per year — verify current status as this has been politically volatile.

What is adjusted cost base in Canadian crypto tax? +

ACB (adjusted cost base) is Canada's default cost-basis method. It's a running average: all your units of a specific crypto are pooled at an average cost that recalculates on every purchase. On disposal: gain = proceeds minus (ACB × units sold). Similar to UK Section 104 pooling. Crypto-tax tools with Canadian support (Koinly, CoinTracking, Accointing) automate ACB. Important: ACB is tracked per-asset, so ACB for your BTC is independent of ACB for your ETH.

Is crypto-to-crypto taxable in Canada? +

Yes. A swap (BTC for ETH) is a disposal of BTC at CAD fair market value. You realize a gain or loss on the BTC side; the ETH acquisition uses that CAD value as its cost basis. This applies even if both sides are crypto — Canadian tax law treats a swap as two simultaneous transactions.

How are staking and mining taxed in Canada? +

Staking rewards: CRA treats as ordinary income at CAD FMV on receipt. When later disposed, an additional capital-gains event applies to any gain since receipt. Mining: hobby mining = business income only when disposed; commercial mining = business income at receipt + ongoing. The distinction between hobby and business is fact-pattern based — CRA examines factors like equipment investment, regularity, and profit motive.

Where do I report crypto on my Canadian tax return? +

Capital gains: Schedule 3 of the T1 tax return. Each disposal is reported; aggregate gains flow into line 12700. Business income: Schedule T2125. Foreign-held crypto: Form T1135 (Foreign Income Verification Statement) if total cost of foreign property including crypto at non-Canadian exchanges exceeded CAD $100,000 at any point in the year. Crypto on Canadian-domiciled exchanges (Bitbuy, Newton, Coinsquare) doesn't count toward the T1135 threshold.

What penalties does the CRA impose for non-compliance? +

Under-reporting penalties: late-filing 5% of balance owing + 1% per month up to 12 months. Gross negligence: 50% of the tax owed. Tax evasion (criminal): fines up to 200% of owed tax plus potential imprisonment. T1135 non-filing: CAD $25/day to $2,500 per year. Voluntary Disclosures Program (VDP) allows taxpayers to correct past non-compliance with reduced penalties — useful if you realize you missed prior-year crypto reporting.

Does the CRA know about my crypto? +

Increasingly yes. Canadian-domiciled exchanges (Bitbuy, Newton, Coinsquare, Crypto.com Canada) are FINTRAC-registered and report to CRA through various channels. CRA obtained a John Doe summons against Coinsquare in 2020 for customer records. The OECD CARF (Crypto-Asset Reporting Framework) extends automatic international tax information exchange to crypto — effective phased in through 2025-2027. Non-disclosure is an increasingly risky strategy.