Cryptocurrency and tax

Selling, trading or spending cryptocurrency usually counts as disposing of it, and you report the result on your return. Depending on how you deal in crypto, the profit is either business income, which is fully taxable, or a capital gain, of which only part is taxable.

The CRA’s term is “crypto-assets”, which includes payment tokens, utility tokens, security tokens, non-fungible tokens (NFTs) and stablecoins.

What counts as a disposition

You generally dispose of a crypto-asset when you:

• sell it or trade it for government-issued currency, such as Canadian dollars
• trade it for another crypto-asset
• use it to pay for goods or services
• give it away or donate it.

That list isn’t complete; other situations can also be dispositions.

Paying with crypto is a barter. Because cryptocurrency isn’t government-issued currency, paying for something with it is treated as a barter transaction. You’ve disposed of the crypto you spent. A seller who accepts crypto as payment includes in their income either the value of the goods or services they provided or the value of the crypto they accepted, whichever is more readily valued.

Trading one coin for another counts too. When you swap coin B for coin A, you’ve disposed of coin B at its fair market value at the time of the trade. If that’s more than what you paid for coin B, you have a gain, even though you never cashed out.

Moving crypto between wallets you own isn’t a taxable disposition.

Business income or capital gain?

How you report depends on whether your crypto activity amounts to carrying on a business. It’s decided case by case, looking at all the factors, and these signs may point to a business:

• you buy and sell often
• you hold crypto for short periods and turn it over quickly
• you know the crypto markets or have experience in them
• you spend a lot of your time studying the markets
• you borrow to buy crypto
• you advertise that you’re willing to buy crypto.

Even a one-off transaction can be business income if it’s an “adventure or concern in the nature of trade”: a deal made to turn a profit, separate from your usual line of work.

If it’s a business, you report the full profit or loss. Crypto you hold as business inventory is generally valued the same way every year: either each item at its cost or its fair market value at year-end, whichever is lower, or all of it at fair market value at year-end. See side gigs and platform income for the basics of reporting self-employment income.

If it’s capital, you have a capital gain when what you get for the crypto is more than its adjusted cost base (usually its cost plus the costs of buying it) plus the costs of selling it. Only part of the gain is taxable: 50% for 2025. Capital losses work the same way in reverse. The allowable part of a loss can only reduce taxable capital gains, not employment or other income. An unused net capital loss can be carried back three years or forward indefinitely; see capital losses.

Mining and staking

Mining. In most cases, the CRA considers crypto mining to be a business because of the scale and resources involved. If you’re in the business of mining, the value of the crypto you receive for it is business income when you earn it. Mining equipment you use in the business, such as ASIC miners and GPU rigs, may qualify for capital cost allowance; the CRA considers that they can fall within class 50.

Staking. Rewards from staking crypto on a centralized exchange platform are generally income when they’re credited to your wallet on the platform.

Putting a value on crypto

Everything goes on your return in Canadian dollars, so you need the value of the crypto at the time of each transaction. The CRA will generally accept fair market value. Use a reasonable method, apply it consistently from year to year and keep a note of it. For example, you could always use the rate from the exchange you trade on, or an average of the high, low, open and close prices across several high-volume exchanges.

Records to keep

Keep records of:

• the type of crypto and number of units in each transaction
• the date and time of each transaction
• the value in Canadian dollars at the time
• what the transaction was, and the other party (even if it’s only their wallet address)
• the addresses of each wallet you use
• each wallet’s opening balance and cost, and its closing balance, for each crypto and each year
• receipts for accounting, legal and software costs.

If you use an exchange, keep its trade and transfer histories. If you mine, keep receipts for hardware, power and pool fees, and your mining pool agreements and records.

Keep your records for at least six years from the end of the last tax year they relate to. Export your exchange history regularly: if the exchange shuts down, stops serving Canada or you lose access to your account, you’ll still have it.

Some crypto activities can also mean collecting and remitting GST/HST; the CRA’s crypto pages cover that separately.

In short

• Selling, trading, spending or giving away crypto is generally a disposition.
• Frequent, business-like trading and most mining produce business income; otherwise the result is usually a capital gain or loss.
• Staking rewards on an exchange are generally income when credited.
• Keep detailed records for at least six years.