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.

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

Yes. If you disposed of crypto during the year, you report those dispositions, even if you ended the year down overall. Reporting also helps your return match your exchange records and on-chain history.

No tax loss exists just because a coin dropped in price. 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 capital gains are taxable, and 50% of capital losses are deductible.

If your losses exceed your gains, you can generally carry net capital losses back up to 3 years or carry them forward to use against taxable capital gains in other years. Capital losses generally do not reduce employment income.

If the CRA treats your activity as business income, losses generally follow business rules instead of the capital loss rules.

Maybe. The superficial loss rule can deny a capital loss for now if you dispose of crypto at a loss and you, or an affiliated person, buys the same or identical crypto in the window around that sale and still owns it at the end of the period.

When the rule applies, the loss is usually deferred, not destroyed. In many cases, the denied loss gets added to the adjusted cost base of the replacement units, which can affect a later gain or 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.

Also watch the superficial loss window. A loss sale near year-end can get deferred if you buy back the same or identical crypto too close to the sale.

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 buy changes your average ACB per unit for that coin. Each disposal uses that average ACB for the units disposed.

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

You generally report capital dispositions on Schedule 3 and carry totals to your return. Keep your worksheets and source records in case the CRA asks how you calculated your results.

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

2. List every disposal: Include sales, crypto-to-crypto swaps, spending crypto, and gifts.

3. Convert each disposal to CAD: Use the CAD value at the time of the transaction and keep a consistent pricing method.

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

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

6. Check superficial loss risk: If you sold at a loss and bought back the same or identical crypto around that time, confirm whether the loss is deferred.

7. Report and save support: Report on the right schedules for your situation and keep the backup.

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.