Staking: the simple case

When a proof-of-stake network (ETH, ADA, SOL, ATOM) pays you a staking reward, the CRA treats that as income at fair market value in CAD on the day it lands in your wallet and is available to you. You owe tax at your marginal rate on that FMV, regardless of whether you sell.

Example: You receive 0.05 ETH at a moment when ETH is $3,000 CAD. You report $150 of income. Your ACB for that 0.05 ETH is now $150. If you later sell at $4,000 CAD ($200 proceeds), you report a $50 capital gain on Schedule 3 (50% taxable under the inclusion rate).

Run the math in our crypto tax calculator.

Centralized staking (Wealthsimple, Coinbase, Kraken)

Same rules apply. The platform reports the rewards on your year-end statement (or T5 in some cases). FMV is the platform's CAD value at the time of credit. You must still aggregate across platforms and self-custody to file correctly.

Mining: the business-vs-hobby test

The CRA decides this based on facts. Indicators of business mining:

• Multiple machines or specialized ASIC hardware
• Dedicated electricity setup (separate meter, industrial rate)
• Time investment — significant hours per week
• Profit motive (you'd shut it off if it stopped paying)
• Commercial-scale electricity bill

If three or more apply, expect business treatment. A single home GPU running PoW mining occasionally probably qualifies as hobby — but if you're profitable and running 24/7, the CRA will likely call it business regardless of your preference.

Business-mining tax mechanics

• Income: 100% of FMV in CAD on the day each block reward or pool payout is received. Reported on Form T2125 (Statement of Business Activities) → Line 13500 of T1.
• Expenses (deductible against the income):
  • Electricity
  • Internet and hosting
  • Pool fees
  • Hardware depreciation — CCA Class 50 (computer hardware), 55% declining balance
  • Software subscriptions, monitoring tools
  • Home-office expense (proportionate to space if mining from home)
  • Hosting / colocation costs if you rent rack space
• GST/HST: Mining services to a registered person can generate ITC claims; consult a CPA before registering.
• Sale of the mined coins later: capital gain (or loss) calculated against the FMV-at-receipt ACB.

Hobby-mining tax mechanics

• Income at receipt: Generally none — CRA treats casual mining like a personal hobby (not a source of income).
• ACB: Zero. This is the trap. When you eventually sell the mined coin for $X, the entire $X is a capital gain.
• No expense deductions.

The hobby route only makes sense if you'll never sell (you give the coins away, donate to charity, or hold forever). For any miner who sells regularly, business treatment is usually better — you trade the 100% inclusion at receipt for the ability to deduct electricity (often 50–70% of mining revenue).

Worked comparison

You mine $20,000 of BTC over the year, with $14,000 of electricity costs.

• Business: $20,000 income − $14,000 expenses − CCA on hardware = ~$5,000 taxable income. At 35% marginal: $1,750 tax.
• Hobby: $0 reported now. When you sell later at the same $20,000, ACB is $0 → $20,000 gain → $10,000 taxable (50% inclusion). At 35%: $3,500 tax. Plus you can't deduct the $14,000 electricity at all.

The business route saves $1,750 here — and that's before factoring in CCA depreciation on hardware. Track expenses from day one.

Airdrops, hard forks, validator rewards

• Airdrops: Income at FMV on receipt. ACB = FMV. Then capital treatment on sale.
• Hard forks (e.g., BCH split from BTC): CRA's position has been ACB = $0 for the new coin (so full sale = capital gain), though some practitioners argue for FMV-at-fork. Conservative: $0 ACB.
• Validator rewards: Same as staking — income at FMV on receipt.

DeFi: yield farming and liquidity provision

The CRA hasn't issued formal DeFi guidance. The conservative reading of existing rules:

1. Depositing into a pool = disposition of the deposited tokens at FMV. Capital gain or loss against ACB.
2. LP token receipt = acquisition with ACB equal to the FMV of what you deposited.
3. Yield received = income at FMV on receipt.
4. Withdrawal from pool = disposition of LP token at FMV; re-acquisition of underlying tokens.

If you do meaningful DeFi (more than a one-off Aave deposit), engage a CPA who specializes in crypto. The audit risk on un-reported DeFi activity is high in 2026 with CARF coming online.

Filing checklist for stakers and miners

1. Export all reward events from each protocol or platform with timestamps
2. Convert each event to CAD FMV on the receipt date
3. Total = your income line for the year
4. If business: file Form T2125 with itemized expenses
5. Track new ACB per coin (FMV at receipt)
6. Report later sales on Schedule 3
7. File T1135 if foreign-held cost > $100K at any point

Related guides

• Crypto Tax Hub
• Crypto Tax Canada 2026 Complete Guide
• How CRA tracks your crypto in 2026
• Self-employed tax calculator (for business miners)

Not tax advice. Mining and DeFi tax in Canada involves multiple grey areas — consult a CPA familiar with crypto for any non-trivial setup. Last reviewed: April 22, 2026.