The framework in 60 seconds

1. Identify positions with unrealized losses (current value < ACB)
2. Sell to realize the capital loss
3. Wait at least 31 days before re-buying the same coin (or buy a different coin / different protocol exposure)
4. Use the loss to offset capital gains elsewhere in 2026, or carry back/forward

The superficial-loss rule, step-by-step

Under ITA s.40(2)(g)(i) + s.54, your capital loss is denied if both:

• You (or an affiliated person — spouse, controlled corp) acquire the identical property in the period from 30 days before to 30 days after the disposition
• You (or an affiliated person) still own the substituted property at the end of that 30-day post-period

If the rule fires, the denied loss is added to the ACB of the new holding — you'll eventually realize it when you sell the substitute, but you can't use it now.

Worked example — BTC harvest done right

• You hold 0.5 BTC with ACB $30,000 (avg $60K/coin), now worth $25,000
• You sell on Dec 15 → realize a $5,000 capital loss
• You wait until Jan 15 (≥31 days) before rebuying BTC
• The $5,000 loss offsets your other 2026 capital gains at the 50% inclusion rate (or 66.67% above $250K of total gains)
• If you have no 2026 gains, carry it forward or back via Form T1A

Worked example — superficial-loss trap

• Same setup, sell Dec 15 for a $5,000 loss
• You buy back 0.5 BTC on Dec 20 (within 30 days)
• You still hold it on Jan 14
• The $5,000 loss is denied — added to the ACB of the new BTC instead
• No deduction this year

Substitution strategies that work

• Different coin: sell BTC, buy ETH — fully compliant. They're different properties.
• Different protocol exposure: sell SOL, buy AVAX
• Bridging asset: sell BTC at loss, hold stablecoin for 31 days, then re-buy BTC
• Take the cash: harvest, hold CAD, redeploy in 2027

Wrapped versions (e.g. WBTC) are technically a different property but CRA's view on substitutes that track the same underlying is unsettled — be cautious.

Tracking ACB across the rebuy

The denied loss adds to the ACB of the substituted property. You don't lose the deduction permanently — it shifts in time. Your ACB calculator should track this carefully, or you'll double-count later.

2026-specific planning notes

• Inclusion rate cliff at $250K: if you've already realized $250K+ of capital gains in 2026, the next dollar of harvested loss saves at the 66.67% inclusion rate — extra valuable.
• Carryback to recover prior tax: if 2023, 2024, or 2025 had heavy gains and you paid CRA, harvest in 2026 and carry back via T1A.
• Year-end timing: dispositions on Canadian exchanges settle instantly, but aim for mid-late December to avoid year-end congestion.

Filing

Report the disposition on Schedule 3 alongside other capital dispositions. The taxable portion of net capital gains/losses flows to T1 Line 12700. For full T1 mechanics see our T1 walkthrough.

Related guides

• Crypto Tax Canada — Complete Guide
• How to Report Crypto on Your T1
• CRA Crypto Audit Guide
• Crypto Tax Hub

Sources: ITA s.40(2)(g)(i), s.54 "superficial loss" definition; CRA Cryptocurrency guide; CRA Income Tax Folio S3-F4-C1. Not tax advice — consult a CPA familiar with crypto for any non-trivial harvest. Last reviewed: April 22, 2026.