In Canada, how you report cryptocurrency profits depends on whether the CRA views your activity as investment (capital gains) or business income (fully taxable). If you buy and hold crypto as an investment, you'll report 50% of your gains as taxable income under the capital gains inclusion rate. If you trade actively or mine crypto as a business, all your profits are fully taxable as business income. The CRA doesn't have a single rule that applies to everyone, so understanding where your situation falls matters a lot for your 2026 tax bill. The Canada Revenue Agency uses several factors to determine whether you're an investor or a business operator: Signs of investment activity (capital gains treatment) - You hold crypto for the long term with no intention to resell quickly - You make occasional transactions with no pattern of regular trading - You don't provide services or expertise to others related to crypto - You have other primary sources of income Signs of business activity (full income treatment) - You trade frequently and regularly - You use sophisticated trading strategies or tools - You generate income by mining, staking, or offering crypto services - Your crypto activity is a significant
Yes, mining is treated as business income in Canada. The fair market value of coins you receive on the date of receipt is fully taxable as income. You can deduct mining costs like electricity and hardware.
Yes, if your crypto activity is treated as investment (capital gains), you can use capital losses to offset capital gains in the same year or carry them back three years or forward indefinitely. If it's business income, losses reduce your overall business profit.
No, simply moving crypto from one wallet or exchange to another is not a taxable event. Tax is only triggered when you sell or exchange crypto for something of value (fiat currency or another asset).
The CRA requires you to use the adjusted cost base (ACB) method, which averages the cost of all coins of the same type. When you sell, multiply the number of coins sold by this average cost to find your gain or loss.
Gifts are not taxable events when received, but the fair market value at that date becomes your cost basis for future tax calculations. Airdrops are treated as income at their fair market value on the date you received them.