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Canadian DeFi tax basics: dispositions, ACB and what CRA has said

An overview of how CRA treats crypto: trades as dispositions, capital vs business income, average-cost ACB, superficial loss, staking and record-keeping.

Blue square · intermediate11 min readFacts checked 2026-10-31
Mitey the yeti weighing a coin in each paw, with a tax receipt with a maple leaf
Mitey says: Keep a tidy ledger as you go, and tax season becomes a sorting job rather than a treasure hunt.

Trail notes

  • Selling, spending, gifting or trading one crypto-asset for another is generally a disposition that can create a gain or loss.
  • Whether a gain is capital or business income is decided case by case, using indicators CRA lists.
  • Half of a capital gain is taxable; the proposed increase in the inclusion rate was cancelled on 2025-03-21.
  • Your adjusted cost base usually uses the average cost of identical crypto-assets, and the superficial loss rule can deny a loss.
  • As of 2026-10-30, CRA has published no DeFi-specific guidance on lending, liquidity pools or wrapping; keep records for at least six years.

What counts as a disposition

In tax terms, a disposition is when you give up ownership of something. CRA’s page on crypto-assets and your tax obligations lists the common ways you dispose of crypto: selling it, trading it for another crypto-asset, using it to pay for goods or services, giving it away or donating it, and gambling with it.

The one that surprises people most is crypto-to-crypto. CRA’s page on reporting income from crypto-asset transactions (date modified 2025-12-02) treats exchanging one crypto-asset for another as a disposition. Swapping Ether for USDC is not a neutral move; you have disposed of the Ether at its fair market value at that moment, and that can produce a gain or a loss even though no Canadian dollars touched your bank account.

CRA also lists acquisitions, including rewards from mining or staking. Each acquisition sets a cost that matters for your next disposition.

Educational overview only

This page explains CRA’s published guidance in plain terms. It is not tax advice. Your situation may differ, and a tax professional who works with crypto can help you apply the rules.

Capital gain or business income?

When you dispose of crypto, the gain or loss is either a capital gain or loss or business income or loss. CRA says the answer is decided case by case. Even a single transaction can be business income if it is an “adventure or concern in the nature of trade”.

CRA lists indicators that point toward business activity:

  • Frequent transactions.
  • Short periods of ownership and quick turnover.
  • Knowledge of crypto-asset markets.
  • Time spent studying crypto-asset markets.
  • Financing purchases with debt.
  • Advertising that you are willing to buy crypto-assets.

The difference matters because business income is fully taxable, while only part of a capital gain is. The capital vs business page goes through the indicators in more detail.

Canadian crypto tax mapWhat happened?Disposed of itsell · trade · spendgift · gambleReceived rewardsstaking · miningUsed DeFilend · LP · wrapbridge · borrowCapital or business?case by case (CRA)capital: ½ taxablebusiness: fully taxableCentralized platformstaking: generallyincome when creditedmining: usually businessCRA silentno DeFi-specificguidance as of2026-10-30Every path: track ACB in CAD · keep records ≥ 6 years · CARF platform reporting proposed for 2027
Canadian crypto tax map: what CRA has said, and where it is silent. Based on CRA pages modified between 2025-10-29 and 2025-12-02 and checked 2026-10-30. Education only; your facts decide your treatment.

See the full infographic with notes.

How much of a capital gain is taxable

For capital gains, half of the gain is taxable. CRA calls this half the taxable capital gain, and you add it to your income. Allowable capital losses (half of a capital loss) can only be used against taxable capital gains; CRA says net capital losses can be carried back three years or forward indefinitely.

Inclusion rate status

A proposal to raise the capital gains inclusion rate was cancelled, as announced by the Prime Minister’s Office on 2025-03-21. The one-half inclusion rate continues, and CRA’s crypto transactions page (date modified 2025-12-02) also states that half of a capital gain is taxable.

Mining is treated differently. CRA’s mining and staking page (date modified 2025-11-10) says mining will in most cases be considered carrying on a business, with the value of rewards included in business income when earned.

Adjusted cost base: the average-cost rule

Your gain or loss is the proceeds minus your adjusted cost base (ACB) and any selling costs. CRA describes the ACB of a crypto-asset as usually its weighted average cost. Under the identical-property rules, each time you buy more units, you recalculate the average cost per unit. Selling units does not change the per-unit ACB of what remains.

Example: hypothetical average-cost ACB
You buy 2 units of a crypto-asset for $2,000 in total. ACB per unit: $1,000.
Later you buy 2 more for $4,000. Total cost $6,000 for 4 units. ACB per unit: $1,500.
You sell 1 unit for $2,500. Gain: $2,500 − $1,500 = $1,000 (ignoring fees).
Taxable capital gain if it is capital: half of $1,000 = $500.
The 3 units you still hold keep an ACB of $1,500 each, or $4,500 in total.

Fees paid to acquire crypto are generally added to the cost. The ACB page explains the rule step by step, and the ACB calculator on deficalculator.ca will do the arithmetic for you.

The superficial loss rule

If you sell at a loss and buy the same thing back quickly, the loss may be denied. CRA’s capital losses page (date modified 2026-02-05) describes a superficial loss: you dispose of capital property at a loss, and you or an affiliated person (such as your spouse or common-law partner) buys identical property in the period from 30 calendar days before to 30 calendar days after the sale, and still holds it 30 days after the sale.

When that happens, you cannot deduct the loss. You can usually add the denied amount to the ACB of the substituted property, so the loss is deferred rather than erased.

CRA’s crypto pages do not mention superficial loss, so applying it to crypto relies on the general rule for identical property. Whether two different tokens count as “identical” has not been addressed by CRA’s crypto guidance. See the superficial loss page for more.

Staking, DeFi and what CRA has not addressed

CRA does have staking guidance, but it is narrow. Its mining and staking page (date modified 2025-11-10) says rewards from staking on a centralized crypto-asset exchange platform will generally be considered income at the time they are credited to your wallet on the platform.

Many common DeFi activities are not covered by CRA’s published crypto pages:

  • Staking from your own wallet, through a pool or using liquid staking tokens.
  • Lending and borrowing on decentralized protocols.
  • Depositing into and withdrawing from liquidity pools, and the pool tokens you receive.
  • Wrapping one token into another, such as moving an asset onto a different network.
  • The cost basis of staking rewards and whether staking is business or property income.
No DeFi-specific guidance yet

As of 2026-10-30, CRA has published no DeFi-specific guidance on lending, liquidity pools or wrapping. That does not mean these activities are tax-free. It means you apply the general rules, keep careful records and, where the amounts matter, get professional advice. The DeFi transactions page walks through the open questions.

Staking rewards are discussed further on the staking and rewards page.

Records, and the reporting rules on the way

CRA’s books and records page (date modified 2025-11-10) asks you to keep, for each transaction, the date and time, the type and number of units, the value in Canadian dollars, the nature of the transaction and the other party (which may only be an address). It also asks you to record your wallet addresses and each asset’s balance at the start and end of the year. CRA advises exporting platform history regularly in case a platform closes or you lose access. Keep records for at least six years from the end of the last tax year they relate to. The record-keeping page has a template.

Reporting by platforms is also changing. Under the proposed Crypto-Asset Reporting Framework (CARF), crypto-asset service providers would file annual information returns about their users. Budget 2025 (2025-11-04) said CARF would proceed with a deferred application date of January 1, 2027. The implementing bill, C-31, had a committee report with amendments presented on 2026-10-30 and had not received Royal Assent as of that date. CARF is proposed, not law. See CARF reporting.

For the full picture, work through the tax section, starting with crypto dispositions. Use the tax map infographic to see which events matter, check transactions with the tax event classifier and, before December 31, run through the tax year-end checklist.

Your checklist

Questions people ask

Is trading one crypto for another taxable in Canada?

Yes, generally. CRA treats exchanging one crypto-asset for another as a disposition, so you may have a capital gain or loss, or business income, based on the fair market value at the time of the trade.

How much of a crypto capital gain is taxed in Canada?

Half. Only one-half of a capital gain is included in income as a taxable capital gain. The proposed increase to the inclusion rate was cancelled on 2025-03-21, so the one-half rate continues.

Does CRA have rules for DeFi lending and liquidity pools?

Not specifically. As of 2026-10-30, CRA has published no DeFi-specific guidance on lending, liquidity pools or wrapping, so general income tax rules apply. Keep detailed records and consider professional advice.

How long should I keep crypto tax records?

CRA says to keep records for at least six years from the end of the last tax year they relate to. Include dates, amounts, Canadian-dollar values, wallet addresses and exported platform histories.

Will crypto platforms report my transactions to CRA?

That is proposed. Under the Crypto-Asset Reporting Framework, platforms would file annual information returns about users, with a deferred application date of January 1, 2027. The implementing bill, C-31, had not received Royal Assent as of 2026-10-30.

Sources and dates

Education only. Nothing on this page is financial, investment, tax or legal advice, or a recommendation to buy, sell, stake, lend or borrow any crypto-asset. Crypto-assets can lose some or all of their value and are not covered by CDIC. Canadian rules change: check the dated sources above and talk to a qualified professional about your situation. Full disclaimer.