How Are Crypto Losses Taxed in Canada? 2026

The CRA treats cryptocurrency as property. You usually trigger tax when you dispose of crypto, not when you buy it.

A disposal can include selling for CAD, trading one crypto for another, using crypto to buy something, or gifting crypto. Moving crypto between wallets you own isn't a disposal, so it doesn't create a gain or loss.

Your result is generally capital or business, depending on your facts. That classification matters because capital losses and business losses follow different rules.

For the CRA's own guidance, see its information for crypto asset users and reporting income from crypto asset transactions.

Yes. If you disposed of crypto during the year, you report those dispositions on Schedule 3, even if you ended the year with a net capital loss. Reporting also helps your return match your exchange records and on-chain history.

No tax loss exists just because a coin's price dropped. A loss usually becomes real for tax when you dispose of the units.

Yes, sometimes. If your crypto activity is on capital account, you can generally use capital losses to offset capital gains. In Canada, 50% of a capital gain is taxable, and 50% of a capital loss becomes an allowable capital loss that you can use against taxable capital gains. A proposed increase to two-thirds was canceled in March 2025, so the 50% rate still applies.

Example: Say you realize a CAD $5,000 capital loss on crypto and a CAD $2,000 capital gain on stocks in the same year. Your allowable capital loss is CAD $2,500, and your taxable capital gain is CAD $1,000. The loss wipes out the taxable gain for the year, and the remaining CAD $1,500 is a net capital loss. That isn't a CAD $1,500 refund. It's an amount you can use against taxable capital gains in another year.

If your allowable capital losses are more than your taxable capital gains, the difference is a net capital loss. You can carry it back to any of the 3 previous years with Form T1A, Part 5, or carry it forward with no time limit. File Schedule 3 with your return so the CRA records the loss. Don't file an amended return for the earlier year to apply the loss. Capital losses generally do not reduce employment income.

When someone dies, their legal representative can use unused net capital losses to reduce any type of income on the final return, the return for the year before death, or both. The amount is reduced by any capital gains deduction the person claimed during their lifetime.

If the CRA treats your activity as a business, report it on Form T2125, Statement of Business or Professional Activities, and not on Schedule 3. The full loss counts, and it can reduce your other income for the year, such as wages. Any unused part can be carried back 3 years or forward 20 years. To carry it back, file Form T1A.

The superficial loss rule can deny a capital loss for now if you dispose of crypto at a loss and you, or a person affiliated with you, acquire the same or identical crypto during the period that starts 30 days before the sale and ends 30 days after it. The rule applies only if you or that affiliated person still owns the crypto, or has a right to acquire it, at the end of that period. Affiliated persons include your spouse or common-law partner and a corporation controlled by you or your spouse.

For example, if you sell BTC at a loss on December 15, buy it back on December 27, and still hold it on January 14, the loss is a superficial loss, and you can't deduct it for that year.

When the rule applies, the loss is usually deferred. The person who acquired the replacement crypto can usually add the denied loss to the adjusted cost base of those units, which lowers a later gain or increases a later loss.

For most individuals, the tax year ends on December 31. If you want a loss to count in that tax year, the disposal needs to show up as completed by December 31 in your records. Exchanges often timestamp trades in UTC, so check the local date of any trade made late on December 31.

Most individuals must file their return and pay any balance owing by April 30 of the following year. If you or your spouse or common law partner is self employed, the filing deadline is June 15, but any balance owing is still due April 30.

Also watch the superficial loss window. If you sell crypto at a loss in late December and you, or a person affiliated with you, acquire the same crypto within 30 days before or after the sale, the loss can be denied for that year, even when the repurchase falls in January.

To claim a capital loss, you need support for your adjusted cost base (ACB). In plain terms, ACB is what you paid for the units, plus eligible acquisition costs, tracked in CAD.

For identical properties, Canada generally uses an average cost approach. Each coin is its own pool, so average your BTC across all wallets and exchanges you use. Each buy changes your average ACB per unit for that coin. Each disposal uses that average ACB for the units disposed.

For example, if you buy 1 ETH for CAD $2,000 and another for CAD $3,000, your ACB is CAD $2,500 per ETH before fees. If you later sell 1 ETH for CAD $2,000, you have a CAD $500 capital loss before selling costs.

If your activity is capital, you generally calculate each disposal like this:

• Proceeds in CAD

• Minus ACB in CAD

• Minus selling costs, like trading fees

Report capital dispositions in the crypto-assets section of Schedule 3, Capital Gains (or Losses), in Canadian dollars. The taxable half then carries to line 12700 of your return. Keep your worksheets and source records in case the CRA asks how you calculated your results.

To use a net capital loss from an earlier year against this year's taxable capital gains, claim it on line 25300 of your return. Your notice of assessment or reassessment shows any unapplied net capital losses.

If your crypto is capital property and is stolen without compensation, the CRA treats it as disposed of on the date you discover the loss, which can result in a capital loss. If you trade crypto as a business, a theft by a stranger is normally deductible from business income when theft is a risk of that business and the loss is incidental to its normal activities. Lost keys, worthless coins and failed exchanges depend on your facts, so ask a tax professional.

• Gather your raw data: Export CSVs from each exchange and pull wallet history and transaction IDs for on-chain activity.

• List every disposal: Include sales, crypto-to-crypto swaps, spending crypto, and gifts. Mark transfers between your own wallets separately, since they aren't disposals.

• Convert each disposal to CAD: Use the CAD value at the time of the transaction and keep a consistent pricing method. If a price is only in US dollars, convert it with the Bank of Canada rate for that day.

• Update your ACB worksheet: Track buys, fees, and other events that change ACB for each coin.

• Calculate gains and losses: For each disposal, compute proceeds minus ACB minus selling costs.

• Check superficial loss risk: If you sold at a loss and you, or a person affiliated with you, acquired the same or identical crypto within 30 days before or after the sale, check whether the loss is a superficial loss.

• Report and save support: Report capital results on Schedule 3 and business results on Form T2125. Keep your worksheets and exchange records for at least six years from the end of the tax year they relate to.

Pro tip
Beyond losses, it's important to understand crypto taxes in Canada broadly. We cover this in our comprehensive expert Canada crypto tax guide.