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Bitcoin is taxable in Canada when you dispose of it: selling it, trading it, spending it on goods or giving it away. Holding it is not. Investors include half of the gain in income, and traders report business income. This page works through a buy, a part sale and a purchase with example numbers.
Is bitcoin taxable in Canada?
Yes, when you dispose of it. The CRA treats bitcoin and other crypto-assets as property. It says that selling crypto for dollars, trading it for another crypto-asset, using it to buy goods or services, and giving it away are all dispositions, and a disposition can produce a capital gain or loss. For most people who invest, half of a gain is added to income. For people whose activity looks like a business, the whole profit is business income.
The CRA pages do not name bitcoin separately. They talk about crypto-assets, and the rules are the same for any coin. That makes the answer to "is bitcoin taxable in Canada" a yes, but only on the events listed above, and the amount depends on your cost. Our page on whether crypto is taxable covers the general rule, and the crypto tax guide collects the CRA positions.
The examples below use made up bitcoin prices in Canadian dollars. They are not predictions and they do not describe the market.
What if you only hold bitcoin?
Holding is not on the CRA list of dispositions. Suppose you buy 0.2 bitcoin at $100,000 each and pay a $100 fee. Your cost is $20,100, which is $100,500 per bitcoin. If the price later rises to $120,000, your holding is worth $24,000, a paper gain of $3,900. No tax is due on that paper gain for the year, and nothing goes on your return, as long as you do not sell, trade or spend any of it.
The fee is part of the cost. The CRA capital gains guide describes the adjusted cost base as usually the cost of the property plus the expenses of acquiring it. Keep the receipt, the date and the Canadian dollar value, because the CRA books and records page asks for them and you need them on the day you sell.
How is a part sale of bitcoin taxed?
Selling part of a holding uses the average cost of the whole holding. CRA guide T4037 says that for identical properties you divide the total cost by the number you own, and that selling some does not change the average cost of the rest. The CRA crypto pages do not say that units of one coin are identical properties, but many preparers apply the rule, and you should confirm it with the CRA or a professional.
Take the holding above and sell 0.05 bitcoin at $120,000, paying a $30 fee.
| Line | Amount |
|---|---|
| Proceeds, 0.05 bitcoin at $120,000 | $6,000 |
| Selling fee | -$30 |
| Net proceeds | $5,970 |
| ACB of 0.05 bitcoin (0.05 x $100,500) | -$5,025 |
| Capital gain | $945 |
| Taxable capital gain (half) | $472.50 |
The gain is $945, and $472.50 of it goes into income. If you are at $90,000 of other taxable income in Alberta, the extra tax is about $144.11 with 2026 rates, before credits. Your remaining 0.15 bitcoin keeps its $100,500 average cost.
If the price had instead fallen to $80,000, the same sale would look like this.
| Line | Amount |
|---|---|
| Proceeds, 0.05 bitcoin at $80,000 | $4,000 |
| Selling fee | -$30 |
| Net proceeds | $3,970 |
| ACB of 0.05 bitcoin | -$5,025 |
| Capital loss | $1,055 |
| Allowable capital loss (half) | $527.50 |
The loss can only be used against taxable capital gains, as the CRA says. Our capital loss page shows the carryback and carryforward rules.
Is spending bitcoin on goods a sale?
Yes. The CRA says that using crypto to pay for goods or services is treated as a barter transaction. For the person who spends the coin, the usual reading is that the value of what you receive is the proceeds of the coin you give up. The CRA pages we read do not set that out in so many words, so confirm it for your case. That makes buying a coffee, a laptop or a flight with bitcoin a disposition of the bitcoin you spend.
Here is an example. You pay for a $2,500 item with 0.02 bitcoin.
| Line | Amount |
|---|---|
| Value of the goods you received | $2,500 |
| ACB of 0.02 bitcoin (0.02 x $100,500) | -$2,010 |
| Capital gain | $490 |
| Taxable capital gain (half) | $245 |
The extra tax in the same Alberta example is about $74.73. The amount is small, but each purchase is its own disposition, so many small payments make many lines of records. The CRA says the person who accepts crypto for goods or services includes in income the value of the goods or services or the value of the crypto, whichever is more readily valued. Our page on getting paid in crypto covers that side.
Is bitcoin earned as pay taxed differently?
The CRA page on income from crypto-asset transactions does not address bitcoin received as employment pay, so we cannot state a rule from that page. For crypto received for goods or services, the barter wording above applies, and the amount is included in income. If you run a business and accept bitcoin, you report the value you received as business income.
Selling that bitcoin later is a separate disposition. The CRA says selling or trading crypto can create income or a capital gain or loss, so the second step depends on whether the activity is a business. The CRA pages do not spell out the cost to use for coins that arrive as payment. Many preparers use the amount that was included in income, which is the usual reading, but you should confirm it with the CRA or a qualified professional.
Mining and staking rewards are covered in their own pages: the mining tax page and the staking income page.
How do you convert bitcoin to Canadian dollars?
The CRA reports crypto values in Canadian dollars, so every purchase, sale and trade needs a Canadian dollar value at the time it happened. The CRA valuing page says it generally accepts fair market value, which it describes as the highest price a willing buyer and a willing seller would agree to. It also says to use a reasonable method and to use the same method from year to year.
The page gives two examples of reasonable sources: an exchange rate from the same broker you use, or an average of high, low, open and close values across several high volume brokers. The page does not set one required source. Pick one method, write it down and apply it to every transaction. If you pay in US dollars, convert the dollar cost as well, since T4037 reports gains in Canadian dollars.
What records prove the cost?
The CRA books and records page for crypto-assets lists what to keep: the number of units, the date and time, the Canadian dollar value, the nature of each transaction and the other party (which can be only their crypto-asset address), your wallet addresses, and the beginning and ending balance of each coin with the cost of the opening balance. If you use a platform, add its trade and transfer ledgers.
The CRA says to keep them for at least six years from the end of the last tax year they relate to, and to export your history regularly in case the platform stops operating or you lose access. For one bitcoin purchase in the example, a good record is the date, 0.20 bitcoin, $100,000 per bitcoin, a $100 fee and the $20,100 total. Our adjusted cost base page shows how those lines turn into an average cost.
This page is information only. We do not prepare returns, we do not represent the CRA or any organization, and we do not guarantee that the figures fit your case. The prices are made up.
Frequently asked questions
Is bitcoin taxable in Canada?
Yes, when you dispose of it. Selling it for dollars, trading it for another coin, spending it on goods or services and giving it away are all dispositions under the CRA pages. Each can produce a capital gain or loss. Holding bitcoin you have not sold is not a disposition.
How is bitcoin taxed in Canada?
For an investor, half of the capital gain is added to income and taxed at your marginal rate. The gain is the proceeds minus the adjusted cost base and selling costs. If the CRA treats your activity as a business, the full profit is business income instead, and expenses can be deducted.
Do I pay tax when I spend bitcoin?
Yes, the CRA treats paying for goods or services with crypto as a barter transaction, so the coins you spend are disposed of. You work out a gain or loss using the value of what you received against your cost. A small purchase can still create a small gain.
Do I pay tax on bitcoin I bought and held?
Not until you dispose of it. A rise in price on coins you still hold is not taxed that year. Keep the date, units, fees and Canadian dollar cost, because those numbers set your gain on the day you sell, trade or spend.
What bitcoin price do I use for Canadian taxes?
Use the Canadian dollar value at the time of each transaction. The CRA accepts fair market value found by a reasonable method that you use every year, such as a rate from the broker you use. The CRA page does not name a single required source, so write down yours.
Is a bitcoin transfer between my wallets taxable?
The CRA says transfers between wallets you own are generally not dispositions, so they do not create a gain. Keep both wallet addresses and the date in your records, so you can show that both wallets are yours and trace the cost of each coin.