Crypto investor tax services: every swap is a disposition — file like it

Capital gain or business income: your pattern sets the rate

CRA treats cryptocurrency as a commodity, so profit on a disposition is either a capital gain — half taxed — or business income, fully taxed. Which one applies is decided by conduct: how often you trade, how long you hold, how much time and study you put in, whether you buy on leverage, and what you intended when you bought. A salaried professional who accumulated bitcoin over five years looks like an investor; an account cycling through altcoins daily looks like a business.

The two characters can coexist in one taxpayer. Long-held core positions can sit on capital account while a high-frequency side strategy is business income, but the split has to be principled and consistent — CRA notices files that report winners as capital gains and losers as business losses. We set the characterization once, document why, and apply it the same way in good years and bad.

The taxable events hiding inside an ordinary wallet

Most crypto tax problems are recognition problems: people file the CAD cash-outs and miss everything else. The Income Tax Act does not care that no dollars moved.

Swaps are where returns collapse. A year of trading pairs on an exchange can mean hundreds of dispositions, each needing a CAD value on its date — and the gain is real tax owing even if every dollar stayed on the platform and the portfolio later fell.

ACB is one pool per coin — not per wallet, not per exchange

Bitcoin held on two exchanges and a hardware wallet is identical property, so the averaging rules give you one blended adjusted cost base per coin across everything you own. Selling from the wallet that happens to show a loss does not create one — the pool decides. We rebuild that pool from complete transaction histories, converted to CAD at each date, usually starting from a Koinly or CoinTracking export and then fixing what the software got wrong: transfers booked as trades, missing histories from closed exchanges, airdrops with no cost assigned. The stakes are real — if you cannot prove cost, CRA can assess the full proceeds as gain. If an exchange you used still exists, export the history now, not when the review letter comes.

Staking and mining: income first, capital gain later

Rewards from commercial staking or mining are generally business income at the fair market value of the coins the day they arrive — not when you sell them. That value then becomes the cost base of the new coins, and price movement afterward is a second, separate gain or loss on disposition. Miss the first layer and you understate income; miss the second and you pay tax twice on the same value. Small-scale, non-commercial activity sits in greyer territory, so we set the treatment deliberately and keep it consistent rather than letting the software guess.

The year-end jobs: T1135 and harvesting losses that survive

Coins held on a foreign exchange are specified foreign property, and once total cost of foreign property passes $100,000 CAD the T1135 is due — with penalties up to $2,500 a year for not filing, even when no tax is owing. Self-custodied coins are less settled, so we take a documented, consistent position rather than ignoring the form. On losses: the superficial loss rule denies a capital loss if you — or an affiliated person like your spouse or your corporation — rebuy the same coin within 30 days before or after the sale and still hold it 30 days later. Crypto trades around the clock, so an impulsive re-entry can undo a December harvest; rotating into a different asset avoids the rule entirely. US exchange accounts and US-person filing issues are covered on our crypto cross-border tax page, and our tax services page covers how our fixed-fee engagements work.

Source: CRA — Guide for cryptocurrency users and tax professionals.