Crypto Tax Calculator (Capital Gains)

Crypto Tax in Canada — Capital Gains, Business Income, and ACB

The Canada Revenue Agency treats cryptocurrency as a commodity, not as currency. Every disposition — selling crypto for CAD, swapping one token for another, using crypto to pay for goods or services, or gifting crypto — triggers a taxable event. The income tax consequences depend on whether the activity is a capital transaction or a business activity. For most Canadians who buy crypto with after-tax savings and hold for the long term, profits are capital gains: only 50% of the gain is included in taxable income, the rest is tax-free. For frequent traders, miners, and people running a crypto-related business, the same activity becomes business income — 100% taxable as ordinary income, but with full deductibility for losses and expenses.

The classification is fact-specific. The CRA considers frequency of transactions, length of holding, knowledge of markets, time spent on the activity, financing arrangements, and whether the taxpayer’s pattern of activity resembles that of a securities dealer. Reporting inconsistencies across years can trigger audits, so it is wise to be consistent from year one. Even when transactions are reported as capital gains, taxpayers must keep detailed records: dates of every purchase and disposition, the CAD value at the time of each transaction (using a reasonable exchange rate), the type and quantity of cryptocurrency involved, the receiving and sending wallet addresses, descriptions of every party in the transaction, and supporting receipts or screenshots. The CRA can request these records going back at least six years.

Capital Gains vs Business Income — Tax Comparison (Ontario, $40,000 net gain, $90k other income)

The adjusted cost base (ACB) of cryptocurrency works like other identical-property pools. If you buy 1 BTC at $30,000, another at $50,000, and then sell 1 BTC for $70,000, your ACB per coin is $40,000 (the average) and your gain on the sale is $30,000 — not $40,000 measured against the most recently acquired coin. ACB must be calculated separately for each cryptocurrency. Track every transaction in CAD using the spot rate from a reputable exchange at the moment of the trade. Crypto tax software (Koinly, CoinTracker, Crypto Tax Calculator, etc.) can automate this, but the CRA expects taxpayers to verify the output and keep documentation. Report capital gains on Schedule 3, business income on Form T2125, and answer “yes” to the foreign property question on Schedule T1135 if your crypto held on a foreign exchange exceeded $100,000 CAD at any point in the year.