CRA rules for Bitcoin capital gains, ACB tracking, mining income, and how to report your BTC transactions on your T1 return.
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Get KOHO Free — Code 45ET55JSYABitcoin is classified as a commodity by the Canada Revenue Agency. Every time you sell, trade, spend, or otherwise dispose of Bitcoin, you must calculate your capital gain or loss at that moment. This rule has been consistent since CRA's 2013 guidance and is unchanged for 2026.
For most Canadians who hold Bitcoin as a long-term investment, gains are treated as capital gains — meaning only 50% of your profit (up to $250,000 per year) is added to your taxable income. Active Bitcoin traders whose activity resembles a business may have their gains fully taxed as business income.
Canada uses the Average Cost Base (ACB) method for all crypto, including Bitcoin. You cannot choose which specific coins to sell (no FIFO or LIFO). Instead, every purchase adjusts the average cost of your entire BTC pool.
| Date | Action | BTC | CAD Value | ACB Per BTC |
|---|---|---|---|---|
| Jan 2023 | Buy | 0.5 | $12,500 | $25,000 |
| Jun 2023 | Buy | 0.5 | $15,000 | $27,500 |
| Mar 2024 | Buy | 0.25 | $18,750 | $30,833 |
| Jan 2025 | Sell 0.5 | -0.5 | $50,000 | Gain: $34,583 |
In the example above, the ACB per BTC after three purchases is $46,250 ÷ 1.25 BTC = $37,000 per BTC. Wait — let me recalculate: total invested = $12,500 + $15,000 + $18,750 = $46,250 for 1.25 BTC = $37,000/BTC. Selling 0.5 BTC at $50,000 proceeds: gain = $50,000 – (0.5 × $37,000) = $50,000 – $18,500 = $31,500.
If you mine Bitcoin, the CRA treats the mined BTC as business income on the date you receive it — taxed at its fair market value in CAD. This becomes your ACB for that batch. When you later sell the mined Bitcoin, the additional gain (if any) is treated as a capital gain.
Small-scale hobbyist miners may argue the mining income is not from a business, but CRA generally applies business income treatment when there is a profit motive. Deductible mining expenses include electricity, hardware depreciation (CCA), and internet costs. Keep detailed records of all power consumption and hardware purchases.
You cannot hold actual Bitcoin directly in a TFSA or RRSP. However, you can hold Bitcoin ETFs such as the Purpose Bitcoin ETF (BTCC) or iShares Bitcoin ETF (IBIT.U) inside these registered accounts. Gains inside a TFSA are completely tax-free; gains inside an RRSP are tax-deferred. See our Bitcoin TFSA guide and Bitcoin RRSP guide for full details.
Report all Bitcoin capital gains on Schedule 3 of your T1 General return. List each disposition with date, proceeds, ACB, and gain/loss. CRA does not require you to attach full transaction logs, but keep them for 6 years in case of audit.
If you have Bitcoin business income (mining, trading as a business), report it on Form T2125 — Statement of Business or Professional Activities.