Crypto Tax in Canada 2026: Capital Gains, the 50% Inclusion Rate and Business Income
The Canada Revenue Agency (CRA) treats cryptocurrency as a commodity. When you dispose of it, the result is either a capital gain or loss, or business income, depending on how you deal in it. For most long-term investors it is a capital gain, and only half of that gain is taxable.
The 50% inclusion rate
Only 50% of a capital gain is included in your taxable income. That "taxable capital gain" is then taxed at your combined federal and provincial marginal rate.
The federal government had proposed raising the inclusion rate to two-thirds for gains above $250,000, but the increase was cancelled in March 2025. For 2026, the inclusion rate remains 50% for individuals.
2026 federal tax brackets
| Federal rate | Taxable income |
|---|---|
| 14% | Up to $58,523 |
| 20.5% | $58,523 – $117,045 |
| 26% | $117,045 – $181,440 |
| 29% | $181,440 – $258,482 |
| 33% | Over $258,482 |
Provincial or territorial tax is added on top and varies widely.
Run your own numbers with the free calculator: Crypto Tax Calculator
Open calculator →Worked example
An Ontario resident with $80,000 of employment income sells crypto for a $10,000 capital gain.
- Taxable capital gain: 50% × $10,000 = $5,000
- Federal tax at 20.5%: $1,025
- Ontario tax at roughly 9.15% at this income: about $458
- Total: roughly $1,483, an effective rate of about 14.8% on the full gain
What triggers a disposition
- Selling crypto for Canadian dollars or another fiat currency
- Trading one crypto for another
- Using crypto to buy goods or services
- Gifting crypto
Transferring between your own wallets is not a disposition.
Adjusted cost base (ACB)
Canada uses the average cost method for identical properties. Your ACB per coin is the total amount paid for all units of that coin (including fees) divided by the number of units held. When you sell, your gain is the proceeds minus the ACB of the units sold.
Example: you buy 1 ETH for $3,000 and 1 ETH for $5,000. Your ACB is $4,000 per ETH. Selling one ETH for $6,000 produces a $2,000 capital gain, and the remaining ETH still has an ACB of $4,000.
The superficial loss rule
If you sell at a loss and you (or an affiliated person, such as a spouse) buy the same property within 30 days before or after the sale, and still hold it 30 days after the sale, the loss is denied. It is added to the ACB of the repurchased units instead. This matters for anyone trying to harvest tax losses.
Capital gain or business income?
Frequent, short-term trading with the intention to profit can be treated as carrying on a business. In that case 100% of the profit is taxable as business income, and losses are fully deductible. Factors the CRA considers include trading frequency, holding periods, time spent, use of borrowed money and whether trading is part of your occupation. Mining at a commercial scale is generally business income too.
Losses
Allowable capital losses (50% of capital losses) offset taxable capital gains. Unused net capital losses can be carried back three years or forward indefinitely, but only against capital gains.
Staking and other income
Staking rewards and similar receipts are generally income at their fair market value when received. That value becomes the cost of the tokens for future dispositions.
Reporting
Capital gains and losses are reported on Schedule 3 of your T1 return. Keep records of every transaction, including dates, amounts in Canadian dollars, and the purpose of each transfer. See our crypto tax records checklist.
Estimate your Canadian crypto tax
Select "Canada" in the crypto tax calculator, enter your provincial marginal rate, and see the federal and provincial estimate on your taxable half.
CryptoMathly provides educational estimates only and is not financial, investment or tax advice. Crypto assets are volatile and you can lose money. Always verify figures with a qualified professional.