In Canada, receiving cryptocurrency as a gift or inheriting digital assets may or may not trigger immediate tax. Generally, receiving a gift of crypto is not a taxable event itself, but inheriting crypto is treated as if you acquired it at fair market value on the date of death, which can create a capital gains tax liability. The CRA taxes the increase in value from that inherited amount forward, not the value at the time you receive it. When someone gives you cryptocurrency, the gift itself is not taxable income in Canada. This is different from other countries (like the US) where gifts can trigger tax. However, this important distinction comes with a catch: - The gift does not trigger tax when you receive it - You must track the fair market value (FMV) at the time you received the gift as your cost basis - If you later sell that crypto, any gain above that FMV becomes capital gains, which is taxable - If the value drops and you sell at a loss, you can claim a capital loss The person who gave you the gift also has no tax consequence.
No, receiving a crypto gift itself is not taxable. However, you must track the fair market value at the time you received it as your cost basis. Any profit when you later sell is taxable as a capital gain.
The deceased's estate pays capital gains tax on the increase in value from the original purchase to the date of death. You inherit the crypto at the stepped-up value, so gains after that point are your responsibility when you sell.
Your cost basis is the fair market value of the cryptocurrency on the date of death. The estate executor should provide you with a valuation statement to prove this amount for tax purposes.
You do not report the gift itself as income. However, you must report any sale or disposition of that crypto on your tax return when you file. Keep documentation of the gift and its value on receipt.
Yes, if the crypto drops in value after you inherit it and you sell at a loss, you can claim a capital loss. The loss is calculated from the date-of-death fair market value, not the original purchase price.