How Is Cryptocurrency Taxed?

Trading, crypto-to-crypto swaps and staking rewards, and how to keep records

Scott Tang, CPAUpdated 2026-11-052026 rules4 min read

The CRA treats cryptocurrency as a commodity (an asset), not as money. So tax doesn't only come in when you convert back to Canadian dollars: swapping one coin for another, buying something with crypto, or paying with crypto each counts as a "sale". Rewards from mining as a business, and staking rewards that a centralized exchange credits to your wallet, generally have to be recognized as income under the applicable rules; personal mining, other staking arrangements and airdrops have to be assessed separately on the specific facts.

Commodity

The CRA treats cryptocurrency as a commodity, not as money

Swaps count

Exchanging one coin for another is treated as a sale

Capital or business?

Decided on all the facts; even a single transaction can be business income

Average cost

Each type of coin is costed at its average cost

Which transactions you have to report

Transaction	Counts as a sale Calculate the gain or loss	Counts as income Included at market value when received	Usually nothing to report
Buying crypto with Canadian dollars	—	—	✓Just record the cost
Selling crypto for Canadian dollars	✓	—	—
Swapping one coin for another	✓At market value at the time of the swap	—	—
Buying things or paying with crypto	✓	—	—
Receiving crypto as wages or as payment for goods	—	✓	—
Mining, staking, airdrops	—	◐Assessed separately: business mining, exchange staking rewards and airdrops are treated differently, based on the facts and CRA guidance	—
Moving coins between your own wallets	—	—	✓But keep records

Buying crypto with Canadian dollars

🔁 Counts as a sale: —
💰 Counts as income: —
➖ Usually nothing to report: ✓Just record the cost

Selling crypto for Canadian dollars

🔁 Counts as a sale: ✓
💰 Counts as income: —
➖ Usually nothing to report: —

Swapping one coin for another

🔁 Counts as a sale: ✓At market value at the time of the swap
💰 Counts as income: —
➖ Usually nothing to report: —

Buying things or paying with crypto

🔁 Counts as a sale: ✓
💰 Counts as income: —
➖ Usually nothing to report: —

Receiving crypto as wages or as payment for goods

🔁 Counts as a sale: —
💰 Counts as income: ✓
➖ Usually nothing to report: —

Mining, staking, airdrops

🔁 Counts as a sale: —
💰 Counts as income: ◐Assessed separately: business mining, exchange staking rewards and airdrops are treated differently, based on the facts and CRA guidance
➖ Usually nothing to report: —

Moving coins between your own wallets

🔁 Counts as a sale: —
💰 Counts as income: —
➖ Usually nothing to report: ✓But keep records

Capital gain or business income?

Item	Capital gain	Business income
Typical pattern	Occasional buying and selling, holding long term	Frequent trading, run like a business, large-scale mining
Amount included in income	Half	All of it
Losses	Can only offset capital gains	Can offset other income
What the CRA looks at	How often you trade, how long you hold, the time and knowledge you put in, whether you trade with borrowed money, whether you have a business plan	The same factors

How to calculate your cost

1
Each purchase
Record the quantity, the cost in Canadian dollars and the fees
2
Pool the same coin
Total Canadian-dollar cost ÷ total quantity = average cost
3
Sell or swap
Market value (in Canadian dollars) − average cost × quantity
4
Coins received as income
The market value included in income becomes their cost

Points to watch

Keep your own records
Crypto exchanges can shut down and data can be lost; keep the date, quantity, Canadian-dollar value and wallet addresses for every transaction for at least 6 years.
The superficial loss rule applies too
If you buy the same coin within 30 days before or after the sale and still hold it on the 30th day after the sale, you can't claim the loss that year.
Foreign exchanges
Whether coins held on a foreign exchange count as foreign property for the T1135 depends on the facts; the CRA has said that cryptocurrency may be specified foreign property.
Lost or stolen
You may not be able to claim a loss; it depends on the facts and the evidence.

How Sheng Qian CPA can help

Organize your transaction records
We turn the records exported from your exchanges into Canadian-dollar costs and the gain on each transaction.
Determine the nature of your gains
Based on how you trade, we assess whether you have capital gains or business income.
Tax return and reporting together
Capital gains, income and the T1135 handled together; for prices, see "What Sheng Qian CPA Can Do for Investors: Tax Returns, Accounts and Annual Planning" in this series.

Sources

Disclaimer

This article is general information only and is not tax or investment advice. Everyone's situation is different; please consult a CPA about your specific arrangements. Service fees are as set out in our written quote.