Definition
A capital gain arises when you dispose of a cryptocurrency held as an investment for more than its adjusted cost base. In Canada, the Canada Revenue Agency (CRA) treats most ordinary crypto investors under capital gains rules rather than business-income rules. This is general information, not tax advice; whether your activity is capital or business in nature depends on your facts.
What counts as a disposition
A disposition is broader than cashing out to dollars. Selling Bitcoin for CAD, swapping one coin for another, using crypto to buy goods or services, and gifting crypto are all dispositions that must be reported. Each is measured at the fair market value in CAD at the moment of the transaction, minus your ACB and any selling costs.
The inclusion rate
Canada taxes only a portion of a capital gain. The inclusion rate is 50%, meaning half of your net gain is added to taxable income and taxed at your marginal rate. A proposed increase to 66.67% on annual gains above $250,000 was announced and then abandoned — the federal government confirmed in 2025 it would not proceed, so 50% remains the operative rate. Capital losses can offset capital gains, but watch the superficial loss rule if you rebuy quickly.
Note the contrast with mining business income, which is taxed at 100% inclusion. Confirm your situation with a Canadian tax professional.
In Simple Terms
A capital gain arises when you dispose of a cryptocurrency held as an investment for more than its adjusted cost base. In Canada, the Canada…