The CRA is paying attention — are you?
Over the past few years, cryptocurrency has moved from niche investment to mainstream asset class. Whether you’re trading Bitcoin, mining Ethereum, or staking Solana, the Canada Revenue Agency (CRA) treats these activities as taxable events — and the rules can be complex.
Here’s what every Canadian crypto investor and business owner should know.
1. Cryptocurrency Is Not “Money” to the CRA
The CRA does not consider cryptocurrency to be legal tender. Instead, it’s treated as a commodity under the Income Tax Act.
That means when you dispose of it — by selling, trading, gifting, or even using it to buy goods or services — you may trigger taxable income or capital gains.
2. Trading and Investing: Capital Gains vs. Business Income
The most common question we get is:
“Is my crypto profit a capital gain or business income?”
The answer depends on your intent and activity level.
- Capital Gains apply when you’re investing for the long term. You report 50% of the gain as taxable income.
- Business Income applies when you trade frequently, use automation or leverage, or operate like a professional trader. In this case, 100% of the profit is taxable.
The CRA looks at several factors, including frequency of trades, holding periods, and the effort involved in generating profit.
3. Crypto Mining and Staking
Income from mining or staking is generally taxable as business income when earned.
If you later sell or trade the coins, any change in value since acquisition could also create a capital gain or loss.
Keeping clear records is key — including the fair market value of coins on the day they’re received.
4. Record-Keeping Matters
Unlike traditional investments, cryptocurrency transactions are decentralized. The CRA requires you to maintain detailed records of all transactions, including:
- Dates and times of each trade or transaction
- Value in Canadian dollars
- Wallet addresses
- Exchange records and receipts
Software tools can help track these details, but responsibility ultimately rests with you.
5. Reporting Foreign Crypto Accounts
If you hold cryptocurrency on foreign exchanges, you may also need to file Form T1135 (Foreign Income Verification Statement) — even if you don’t sell anything.
The CRA considers these platforms to be foreign property if your total cost exceeds $100,000 CAD at any time in the year.
6. Losses and Deductions
Crypto losses can be valuable too.
- Capital losses can offset capital gains.
- Business losses may be deductible against other income.
Documenting these properly can make a big difference in your tax outcome.
7. The Bottom Line
Crypto offers exciting opportunities — but it also comes with tax obligations.
With the CRA increasing audit focus on digital assets, accurate reporting and planning are essential. A proactive tax strategy can help you minimize exposure and stay compliant.
Need Help Navigating Crypto Tax Rules?
Our team works with investors, miners, and businesses across Canada to help report cryptocurrency correctly — and optimize your tax position.
This blog was written by Brian Petersen.
Want to make sure it all adds up? Connect with us!
At JMH & Co., we are your partner for financial success.
Book an appointment with us or give us a call today.
Medicine Hat (403) 527-4451
Brooks (403) 362-4004
Calgary (403) 261-0835
