Get Off Zero.

How CRA Treats Bitcoin

In Canada, the Canada Revenue Agency (CRA) does not treat Bitcoin as currency. It is generally considered a commodity—like gold or silver. When you dispose of Bitcoin, the transaction is usually taxed as a capital gain or loss, unless you are trading as a business.

Simply buying Bitcoin and holding it in your own wallet does not trigger a tax event. Taxes generally apply when you sell, trade, spend, or otherwise dispose of your Bitcoin.

Taxable Events

You may need to report Bitcoin activity when you:

• Sell Bitcoin for CAD (or another fiat currency)
• Trade Bitcoin for another cryptocurrency (e.g., BTC → ETH)
• Spend Bitcoin on goods or services
• Give Bitcoin as a gift (may trigger deemed disposition rules)
• Use Bitcoin in a business (income and expenses may apply)

Generally not taxable: buying Bitcoin with CAD, transferring Bitcoin between your own wallets, and holding long-term (HODLing).

Capital Gains Basics

When you sell Bitcoin for more than your cost, you have a capital gain. In Canada, only 50% of your capital gain is included in your taxable income (the "inclusion rate").

Simple example:

• You bought 0.1 BTC for $5,000 CAD (including fees)
• You later sold it for $8,000 CAD
• Capital gain = $3,000
• Taxable portion (50%) = $1,500 added to your income

If you sell for less than your cost, you have a capital loss. Losses can offset capital gains, but there are rules—especially the superficial loss rule (see below).

Adjusted Cost Base (ACB)

Your Adjusted Cost Base (ACB) is what you paid for your Bitcoin, including purchase fees. CRA generally requires the average-cost method when you buy Bitcoin at different prices over time.

How average cost works:

1. Add up the total CAD you spent on purchases (including fees)
2. Divide by your total Bitcoin owned
3. That average cost per BTC is your ACB when you sell

Keep records of every purchase: date, amount of BTC, CAD price, exchange fees, and the platform used (e.g., Shakepay).

Capital Gains vs Business Income

CRA looks at your intent and activity to decide whether profits are capital gains or business income. Business income is taxed at your full marginal rate—not the 50% capital gains inclusion.

Most "Get Off Zero" beginners who buy and hold are likely treated as investors—but get professional advice if you trade actively.

Common Transactions

• Buying with CAD: No immediate tax. Record the date, amount, price, and fees for your ACB.
• Selling for CAD: Report capital gain or loss. Proceeds minus ACB = gain/loss.
• Crypto-to-crypto swaps: Treated as a disposition of Bitcoin at fair market value in CAD—even if you never touch fiat.
• Spending Bitcoin: Treated like selling. You may have a gain or loss based on the value when you spent it.
• Gifting Bitcoin: May be a deemed disposition at fair market value. Rules vary—ask a professional.
• Shakepay ShakeSats rewards: Small BTC rewards may be taxable as income when received. Track them and ask your accountant.

Superficial Loss Rule

If you sell Bitcoin at a loss and buy the same or identical property within 30 days before or after the sale, CRA may deny that loss under the superficial loss rule. The denied loss is added to the ACB of the replacement Bitcoin instead.

This matters if you try to "harvest" tax losses while staying invested. Plan carefully or consult a tax professional.

Record Keeping

CRA expects you to keep records for at least six years. For each transaction, track:

• Date and time of the transaction
• Type (buy, sell, trade, transfer, spend)
• Amount of Bitcoin (in BTC or sats)
• CAD value at the time of the transaction
• Fees paid
• Exchange or wallet involved
• Transaction ID / hash (for on-chain transfers)

Download CSV exports from your exchange regularly. Shakepay provides transaction history you can export for your records.

Tax Software Comparison

These tools help calculate gains, losses, and ACB. Prices and features change—verify on each provider's site before buying.

Filing Checklist

1. Gather all exchange CSV exports and wallet transaction history
2. Calculate total capital gains and losses for the tax year
3. Report capital gains on Schedule 3 (Capital Gains or Losses)
4. Include the Schedule 3 total on your T1 General income tax return
5. File by the deadline (typically April 30, or June 15 for self-employed with balance due April 30)
6. Keep all records for at least six years

Looking ahead: Canada is implementing the Crypto-Asset Reporting Framework (CARF), which will require certain platforms to report transactions to CRA starting in 2026. Keeping clean records now will make future filing easier.