The Canada Revenue Agency (CRA) treats cryptocurrency as a commodity. Disposals – including sales, swaps, and spending – trigger either a capital gain (50% inclusion rate) or business income (100% taxable), depending on your trading activity. CoinTaxReporting calculates your Adjusted Cost Base (ACB) automatically across all exchanges and wallets.

You receive a structured report with per-disposal ACB calculations, net capital gains for Schedule 3, and income event documentation – ready for your T1 tax return.

Key Features

• ACB (Adjusted Cost Base) calculated automatically per cryptocurrency across all platforms.
• 50% capital gains inclusion rate applied – only half the gain is added to taxable income.
• Business income vs. capital gains classification documented with full transaction history.

Canadian Crypto Tax – CRA rules explained

The CRA confirmed that cryptocurrency is treated as a commodity, not currency. This means every disposal is a taxable event. The key question is whether your gains are capital gains (50% inclusion) or business income (100% taxable) – and that distinction depends on your activity level.

Capital Gains vs. Business Income

• Capital gains (50% inclusion): Typical for buy-and-hold investors, occasional traders
• Business income (100% taxable): Frequent trading, day trading, mining as a business
• The CRA looks at: frequency of transactions, holding period, and primary intent at purchase
• No fixed threshold – it is a facts-and-circumstances determination

How the ACB method works

ACB is a running average cost basis. Every purchase updates the average cost per unit across your entire holdings of that cryptocurrency. When you sell, your gain equals: proceeds minus (units sold × current ACB). After the sale, the remaining ACB per unit stays unchanged.

Example: Buy 1 BTC at CAD 40,000. Buy another 1 BTC at CAD 60,000. ACB = CAD 50,000 per BTC. Sell 1 BTC at CAD 70,000 → gain = CAD 20,000 → taxable portion = CAD 10,000 (50% inclusion).

Superficial Loss Rule (30-day rule)

Selling crypto at a loss and rebuying within 30 days before or after triggers the superficial loss rule – the loss is denied and added back to the ACB of the repurchased units. Unlike in Germany, this applies to crypto in Canada. CoinTaxReporting flags these events automatically.

Schedule 3 – reporting capital gains

Capital gains from crypto are reported on Schedule 3 of your T1 tax return. You need: proceeds of disposition, ACB at time of sale, outlays and expenses (fees), and net gain/loss per transaction. CoinTaxReporting exports these values in Schedule 3 format.

Frequently Asked Questions

How are crypto gains taxed in Canada?

Capital gains from crypto have a 50% inclusion rate – only 50% of the gain is added to your taxable income and taxed at your marginal rate.

What is the ACB method?

The Adjusted Cost Base averages the cost of all purchases of a cryptocurrency. When you sell, ACB is deducted from proceeds to calculate the gain.

Are crypto-to-crypto swaps taxable in Canada?

Yes. CRA treats a crypto swap as a disposition, triggering a capital gain or loss based on the fair market value at the time of the swap.

What is the superficial loss rule?

If you sell crypto at a loss and repurchase the same asset within 30 days before or after, the loss is denied. This is Canada's equivalent of the wash-sale rule.