Filing crypto taxes in Canada is more involved than filing for other investments, but the process is straightforward once you understand what the CRA requires. This guide walks through each step.

How the CRA taxes crypto

The CRA classifies cryptocurrency as a commodity. That means crypto transactions are subject to either capital gains tax or income tax, depending on the nature of the activity.

Most transactions are capital gains events. When you dispose of crypto by selling, trading, or spending it, you calculate the difference between what you received and what you paid. If the result is positive, 50% of that gain is added to your taxable income for the year. If it is negative, you have a capital loss, which can offset other capital gains.

Some transactions are income events instead. Staking rewards, mining income, airdrops, and crypto received as payment are generally taxable as income at fair market value in CAD at the time of receipt. These are taxed at your full marginal rate, not the 50% inclusion rate.

Step 1: Gather your full transaction history

You need a complete record of every crypto transaction you made during the tax year, across every exchange and wallet you used. This includes buys, sells, trades, transfers, staking rewards, and any other activity.

A single exchange export is rarely enough. If you've held the same asset on multiple platforms, transferred between wallets, or moved funds on-chain, you need all of that history in one place before you can calculate anything accurately.

Step 2: Calculate your capital gains using the ACB method

Canada uses the Adjusted Cost Basis method to calculate capital gains. ACB averages the cost per unit of an asset across your full holding history. Every time you buy more of an asset, the average cost per unit is recalculated across your entire position.

When you sell, your capital gain or loss is the difference between your proceeds and the ACB of the units sold. This calculation needs to account for every purchase you've ever made of that asset, not just recent activity.

For example, if you bought 1 BTC at $20,000 and later bought another at $60,000, your ACB is $40,000 per BTC. If you then sell 1 BTC for $50,000, your capital gain is $10,000, and $5,000 is included in your taxable income.

Trading fees paid on purchases are added to your cost basis. Fees paid on sales reduce your proceeds. Both reduce your taxable gain.

Step 3: Identify your income events

Go through your transaction history and flag anything that constitutes income rather than a capital gain. Common income events include staking rewards, mining proceeds, referral bonuses paid in crypto, and interest from lending protocols.

For each income event, record the fair market value in CAD at the date of receipt. That amount is your income. It also becomes your cost basis for those tokens, so when you eventually sell them, you only pay capital gains on any appreciation above that amount.

Step 4: Complete your T1 return

Capital gains from crypto are reported on Schedule 3 of your T1 return. You enter your total proceeds, your total ACB, and any outlays or expenses such as trading fees. The net capital gain flows to line 12700, where the 50% inclusion is applied automatically.

Income events are reported separately. Staking rewards and similar income go on line 13000 as other income. If your crypto activity constitutes a business, the income and expenses go on a T2125 business income statement instead.

If you have capital losses that exceed your gains for the year, you can carry them back up to three years or forward indefinitely to offset future capital gains.

Step 5: File by April 30

The deadline for most individual filers is April 30. If you or your spouse are self-employed, you have until June 15 to file, but any tax owing is still due April 30. Filing late when you owe tax results in interest charges from May 1.

You can file using CRA's NETFILE system directly or through tax software that supports it. If you're working with an accountant, share your crypto tax report as early as possible.

How Summ helps

Summ connects to 3,500+ exchanges and wallets, imports your full transaction history, applies the ACB method across all platforms, handles edge cases like the superficial loss rule, and generates a tax report structured for CRA filing. You can hand it to your accountant or use it to complete your return yourself.

Calculate your crypto taxes with Summ →

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