The Canada Revenue Agency (CRA) generally treats virtual currencies as commodities under the Income Tax Act. According to the CRA, "Any income from transactions involving cryptocurrency is generally treated as business income or as a capital gain, depending on the circumstances."
Taxpayers have to establish if a cryptocurrency activity results in income or capital because this affects the way the revenue is treated for income tax purposes. Business income is included in taxable income at 100%, whereas capital gains are included in taxable income at 50%.
Crypto: crypto-to-crypto trades (e.g. BTC for ETH) are taxable dispositions similar to a sale.
Accounting methods in Canada
If you have capital property (non-business, personal use), then the CRA requires that capital gains treatment be applied to your cryptocurrency dispositions. The CRA requires using Adjusted Cost Base (ACB) for these calculations. Your capital gains go onto your Schedule 3 Form. See the CoinTracker Tax Guide for an explanation of how ACB works.
If your cryptocurrency trading activities are instead classified as business income, then your cryptocurrency holdings are generally treated as inventory for tax purposes. You have two options for valuing your cryptocurrency inventory:
- value each item in the inventory at its cost or its fair market value at the end of the year, whichever is lower
- value the entire inventory at its fair market value at the end of the year
In this case, your business income would be reported on T2125 Statement of Business or Professional Activities.
Foreign property
If the cost basis of foreign property, including crypto held in foreign exchanges that’s not registered with the Canadian government, is more than $100,000 CAD, you are required to fill out a T1135 – Foreign Income Verification Statement.
Superficial loss
A superficial loss can occur when you dispose of capital property for a loss and both of the following conditions are met:
- You, or a person affiliated with you, buys, or has a right to buy, the same or identical property (called "substituted property") during the period starting 30 calendar days before the sale and ending 30 calendar days after the sale.
- You, or a person affiliated with you, still owns, or has a right to buy, the substituted property 30 calendar days after the sale.
You cannot deduct a superficial loss from your income on your 2025 taxes. Instead, the loss is deferred and added to the adjusted cost base (ACB). CoinTracker supports superficial loss calculations by automatically applying this adjustment. Learn more about superficial losses.
Airdrops and Forks
Airdrops are nontaxable for individuals. However, if the airdrop is for goods and services, it may be treated as ordinary income if the activity is classified as a trade or business. If you would like to treat them as taxable income, please use the Other income tag.
Forks are non-taxable by default in CoinTracker, but can be toggled to “taxable” if the fork generated a net increase in value under Settings > Tax.
Mining
In most cases, the CRA may deem any mining rewards as income due to the resources needed to pursue Crypto mining. By default, CoinTracker will treat mining rewards as taxable income. If you are mining as a hobby, you have the option to toggle mining to “non-taxable” under Settings > Tax.
TurboTax
Use CoinTracker alongside TurboTax to file your cryptocurrency taxes efficiently. For more detailed steps, visit the TurboTax support page.
Disclaimer: CoinTracker is provided for informational purposes only. This service is not intended to substitute for tax, audit, accounting, investment, financial, nor legal advice. For financial, tax, or legal advice please consult your own professional. See our full disclaimer.