Step 1 — Determine your treatment

Most personal investors get capital gains treatment (50% / 66.67% inclusion). You're more likely a business (100% inclusion) if you trade actively (100+ trades/year), hold positions briefly (avg < 30 days), borrow to trade, mine professionally, or run an arbitrage operation. Read our complete crypto tax guide for the full test.

Step 2 — Build your transaction ledger

Aggregate every disposition across every exchange and wallet for the year:

• Date of disposition
• Crypto disposed of and amount
• Proceeds in CAD (FMV on the disposition date)
• Adjusted Cost Base (ACB) in CAD per unit, weighted across all your purchases
• Capital gain or loss = proceeds − ACB

Crypto-to-crypto trades count as dispositions. Spending crypto on goods or services counts. Receiving mining/staking rewards counts as ordinary income at FMV when received (separate from capital gains).

Step 3 — Capital-gains path: fill out Schedule 3

On Schedule 3, use Section 5 — "Publicly traded shares, mutual fund units, deferral of eligible small business corporation shares, and other shares". Group by identical properties:

• Description: "Cryptocurrency — Bitcoin (BTC)" (one row per coin)
• Proceeds of disposition: total CAD from all BTC sales/trades that year
• Adjusted cost base: total CAD ACB of units disposed
• Outlays and expenses: exchange fees on the disposition side
• Gain or loss: proceeds − ACB − outlays

Total all rows. The total gain/loss flows to Schedule 3 line 19900 (Total taxable capital gains). The taxable portion (after applying 50% / 66.67% inclusion) flows to T1 Line 12700.

Step 4 — Apply the 2026 inclusion rate

For 2026: 50% inclusion on the first $250,000 of total annual capital gains (including non-crypto gains), 66.67% above. The threshold is per-individual, per-year. Estimate your taxable amount with our crypto tax calculator.

Step 5 — Business-treatment path: T2125

If you're a trader or miner taxed as business income:

• Report gross revenue (CAD value of all dispositions and rewards) on T2125 Part 3A
• Deduct allowable expenses (exchange fees, mining electricity, equipment depreciation via CCA)
• Net business income flows to T1 Line 13500 — fully taxable at marginal rates
• If self-employed mining/trading is your main income, you also owe both halves of CPP — see our self-employed CPP calculator.

Step 6 — Mining/staking income

Hobby miners and casual stakers report rewards as other income on Line 13000 at FMV when received. Your ACB for those coins starts at the value when received — any later appreciation is a capital gain on Schedule 3 when sold. Business miners include everything on T2125 instead.

Step 7 — Form T1135 if foreign holdings > $100K CAD

Crypto held on foreign exchanges or in self-custody wallets located outside Canada counts as "specified foreign property". If the total cost ever exceeds $100,000 CAD at any point in the year, you must file Form T1135. Two reporting methods:

• Simplified (cost < $250K all year): aggregate categories
• Detailed (cost > $250K at any point): per-property reporting

Penalty for failure to file: $25/day, up to $2,500. Repeated failures and gross negligence push penalties higher.

Step 8 — Keep your records for 6 years

CRA requires 6 years of supporting records post-filing. Save:

• Exchange CSV exports for every year
• Wallet transaction histories for self-custody
• FMV references at the time of each transaction (CoinGecko / CoinMarketCap snapshots)
• ACB tracking spreadsheet
• Receipts for mining electricity, equipment, software

Step 9 — Software shortcuts

Wealthsimple Tax, TurboTax, and Koinly all import exchange CSVs and auto-build Schedule 3. Even if you use one, sanity-check the totals against your own ledger — none of them get edge cases (DeFi, NFTs, hard forks) right out of the box. See our Wealthsimple Tax review.

Common mistakes

• Forgetting crypto-to-crypto trades
• Using USD instead of CAD for proceeds/ACB
• Missing the superficial-loss rule on re-buys within 30 days
• Not filing T1135 when foreign holdings cross $100K mid-year
• Reporting staking rewards only when sold (must be reported when received)

Related guides

• CRA Crypto Audit Guide 2026
• Bitbuy & Shakepay Tax Reporting 2026
• Crypto Staking & Mining Tax 2026
• Crypto Tax Canada Hub

Sources: CRA Cryptocurrency guide, CRA T4012 T1 General guide 2026, Schedule 3 instructions, Form T1135 instructions. Not tax advice. For non-trivial situations consult a CPA. Last reviewed: April 22, 2026.