Crypto Taxes in Canada 2026: How to Report Crypto to the CRA

What the CRA taxes and what it does not

The CRA's position follows from one classification: crypto is property, not money. Every disposition is measured in Canadian dollars at fair market value on the day it happens.

These transactions are taxable:

• Selling crypto for CAD or another fiat currency.
• Swapping one crypto for another, including stablecoins. The CRA treats a swap as a barter.
• Paying for goods or services with crypto.
• Gifting crypto, which counts as a disposition at fair market value.
• Receiving staking rewards, mining rewards, airdrops or Earn interest, which are income at fair market value on receipt.

These are not taxable on their own:

• Buying crypto with CAD and holding it.
• Moving coins between your own wallets or accounts.
• A drop in price without a sale.

The CRA has not published crypto-specific rules on staking or DeFi. Tax practitioners treat staking rewards as income when received, and the value at receipt becomes the cost base when the coins are later sold. Where the guidance is thin, the general rules apply.

Capital gain or business income: the classification that halves the bill

The same $10,000 profit produces two different tax bills depending on how the CRA reads your activity. As a capital gain, $5,000 enters taxable income. As business income, all $10,000 does.

The Income Tax Act has no bright-line test. The CRA looks at a pattern of facts:

• How often you trade and how long you hold.
• Whether you trade with borrowed money or leverage.
• How much time you spend on it and whether you market yourself as a trader.
• Whether you run it like a commercial operation, with software, a separate entity or staff.

An investor who buys bitcoin twice a year and sells after three years sits on the capital side. A person running hundreds of futures trades a month sits on the business side. The majority fall between, and the burden of supporting a position rests with the taxpayer.

The 50% rate, and the rate that never arrived

Surprisingly, a number of 2026 guides still describe a 66.67% inclusion rate on gains above $250,000. That rule was proposed in Budget 2024, deferred, and cancelled on 21 March 2025. For individuals the inclusion rate is 50% on all capital gains in the 2026 tax year. Business income is not affected by inclusion rates at all. It is taxed at your full marginal rate, which in Ontario reaches 53.53% at the top bracket.

Capital losses work in mirror image. Half of a capital loss is an allowable capital loss. It offsets taxable capital gains only, not employment income, and unused amounts carry back three years or forward indefinitely.

How to calculate your adjusted cost base

Canada requires the average cost method for identical property. You cannot pick which coins you sold, as is allowed in the United States. Every purchase of the same coin blends into one adjusted cost base (ACB), and fees paid to acquire the coin are added to it.

The example below shows two purchases and one partial sale of bitcoin:

The ACB of the 0.4 BTC sold is 40% of $100,100, or $40,040. The capital gain is $50,000 minus the $50 selling fee minus $40,040, which equals $9,910. Taxable capital gain at 50% inclusion is $4,955, added to income for the year.

Swaps follow the same logic. Trading 1 ETH for 3,000 USDC disposes of the ETH at the CAD value of the USDC received, and that value becomes the ACB of the USDC.

The superficial loss rule

Selling at a loss to cut your tax bill and buying straight back does not work. If you, your spouse or a corporation you control acquire the identical coin within 30 days before or after the sale, and still hold it at the end of that window, the loss is denied. The denied amount is added to the ACB of the repurchased coin, so the loss is deferred rather than erased. Whether wrapped or bridged versions of a coin count as identical property is a question the CRA has not answered.

Reporting crypto on your 2026 return

The filing itself takes less time than the record work behind it. In order:

1. Export full transaction histories from every exchange and wallet you used in 2026, including platforms that closed or left Canada.
2. Convert every transaction to CAD at the fair market value on its date, using a consistent source.
3. Calculate ACB and gains per coin with the average cost method, and check each loss against the 30-day superficial loss window.
4. Report capital gains and losses on Schedule 3, with the taxable amount on line 12700 of the T1 return.
5. Report business income, if your activity qualifies, on Form T2125 as self-employment income.
6. Report staking, mining and Earn income that is not business income as other income at fair market value on receipt.
7. File Form T1135 if the total cost of your specified foreign property exceeded $100,000 at any point in 2026.
8. File by 30 April 2027. Self-employed filers have until 15 June 2027, but any balance owing is still due on 30 April.

When T1135 applies to crypto

The CRA has stated since 2015 that crypto is specified foreign property to the extent it is situated, deposited or held outside Canada and not used exclusively in an active business. Crypto on a foreign-based exchange counts toward the $100,000 threshold. Holdings on a platform registered in Canada are generally treated by practitioners as Canadian property, although the CRA has not confirmed that view. Self-custody wallets are a grey area on which the CRA has issued no clear position. Between $100,000 and $250,000, the simplified Part A of the form applies. A late T1135 costs $25 a day, up to $2,500 per year, before any gross negligence penalty.

Crypto held as inventory in a trading business is excluded from specified foreign property, which is one of the few places where business classification works in the taxpayer's favour.

CARF: what the CRA will see from 2027

Until now the CRA has relied on what taxpayers report and on court orders to individual platforms. CARF, the OECD's Crypto-Asset Reporting Framework, changes the default. Platforms will report.

The Canadian timeline has already moved once. Budget 2024 proposed CARF for the 2026 calendar year, with first reporting in 2027. Draft legislation followed on 15 August 2025. Budget 2025, tabled on 4 November 2025, deferred the start to 1 January 2027. The measures now sit in Bill C-31, the Budget 2025 Implementation Act, No. 2. Under that text the first reporting period is the 2027 calendar year, and the first information return is due before 2 May 2028.

Platforms in scope will collect each user's name, address, date of birth, tax residence and tax number. They will report, per user and per asset, the annual value of crypto-to-fiat exchanges, crypto-to-crypto exchanges and transfers. Through the international exchange of CARF data, the CRA is also set to receive information on Canadian residents from foreign platforms in participating countries.

In our interpretation, 2026 is the last year in which unreported crypto activity sits mainly in the taxpayer's own records. After 2027 the CRA will hold a second set. And it will compare them.

Mistakes that lead to reassessments

Crypto returns fail in predictable places. The ones that cost money:

• Ignoring swaps. Each crypto-to-crypto trade is a disposition, even if no CAD ever touched your bank account.
• Using FIFO or specific lots. Canada requires the average cost method. Software set to US defaults produces the wrong ACB.
• Missing fee adjustments. Purchase fees raise ACB and selling fees reduce proceeds. Leaving them out overstates the gain.
• Treating staking as tax-free until sale. Rewards are income on receipt. Selling later produces a second, separate gain or loss.
• Losing records from closed platforms. Binance, Bitget and other exchanges left Canada. Data exports that were not saved before an account closed are hard to recover.
• Claiming capital treatment for daily trading. A high-frequency futures trader reporting 50% inclusion invites a reassessment at 100%, plus interest.

Correcting past years: the Voluntary Disclosures Program

Unreported crypto from earlier years is still correctable. The CRA's revised Voluntary Disclosures Program took effect on 1 October 2025. An unprompted disclosure, filed before the CRA contacts you, qualifies for full relief from civil penalties, up to 75% relief from interest and protection from prosecution. A disclosure made after the CRA has raised the issue counts as prompted and receives 25% interest relief, with penalty relief at the CRA's discretion. Applications go in on Form RC199.

The window matters more each year. Once CARF data starts flowing in 2028, a disclosure covering the same transactions has a good chance of being treated as prompted.