Master the ACB method, understand the two-tier inclusion rate, and calculate your exact capital gains on cryptocurrency for the CRA.
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Get KOHO Free — Code 45ET55JSYAWhen you dispose of cryptocurrency in Canada, the difference between what you received (proceeds of disposition) and what you paid (adjusted cost base, or ACB) is your capital gain or loss. Canada taxes capital gains at a preferential rate: only a portion of the gain is included in your taxable income.
For the 2025 tax year (filed in spring 2026), individuals enjoy a 50% inclusion rate on the first $250,000 of net capital gains per year. Gains above $250,000 are subject to a 66.7% (two-thirds) inclusion rate, as enacted by Budget 2024.
Capital Gain = Proceeds – ACB – Outlays
Canada requires the Average Cost Base (ACB) method for cryptocurrency. You cannot use FIFO (first-in, first-out) or specific identification as you can in the United States. Every time you buy more of a cryptocurrency, you must recalculate your ACB.
| Step | Action | Formula |
|---|---|---|
| 1 | Initial buy | ACB = purchase price + fees |
| 2 | Additional buy | New ACB = (old total cost + new purchase cost) ÷ total units |
| 3 | Sell or dispose | Gain = proceeds – (ACB per unit × units sold) |
| 4 | After sale | Remaining ACB per unit stays the same |
Calculate your capital gain and estimated tax with the two-tier Canadian inclusion rate.
| Taxpayer Type | Amount of Gain | Inclusion Rate |
|---|---|---|
| Individual | First $250,000/year | 50% |
| Individual | Above $250,000/year | 66.7% |
| Corporation | All gains | 66.7% |
| Trust | All gains | 66.7% |
The $250,000 threshold applies to your net capital gains — total gains minus total losses in the year. Only the net gain above $250,000 is subject to the higher rate. Carried-forward losses from prior years can also offset gains, but they do not affect which year's inclusion rate applies.
If you had $300,000 in net crypto capital gains in 2025, the tax would be calculated as: ($250,000 × 50%) + ($50,000 × 66.7%) = $125,000 + $33,350 = $158,350 included in income. At a 50% marginal rate, your tax on those gains would be approximately $79,175.
Capital losses from cryptocurrency can offset capital gains in the same year. If you have more losses than gains, the net capital loss can be:
Importantly, capital losses can only be used against capital gains — not against employment income, business income, or other income types.
Canada has no wash-sale rule, so you can sell at a loss and immediately repurchase the same crypto without losing the tax benefit (though watch the superficial loss rule if affiliated persons are involved). See our full guide to crypto losses.