Updated Checked by the Tax-Services.ca editorial team How we check
A crypto capital loss is the proceeds minus your adjusted cost base and selling costs. Half of it is allowable, and it can only offset taxable capital gains. A net capital loss can be carried back three years or forward without limit, as the CRA explains.
How is a crypto capital loss worked out?
A capital loss happens when the proceeds of disposition are less than the adjusted cost base (ACB) plus the outlays and expenses of making the sale. The CRA's page on reporting income from crypto-asset transactions (dated 2025-12-02) describes the ACB as usually the cost of the crypto-asset plus the expenses to acquire it. A disposition can be a sale for dollars, a trade for another coin, paying for something with crypto, or a gift.
The CRA gives an example. Two crypto-assets are traded: coin B, which cost $25,000, is used to buy coin A worth $20,600. The loss is $20,600 minus $25,000, or $4,400, and the allowable portion is half, $2,200.
Fees count. Here is an example with made up numbers: coins that cost $12,000 are sold for $9,000, and the platform charges a $60 fee on the sale.
| Line | Amount |
|---|---|
| Proceeds | $9,000 |
| Less selling fee | $60 |
| Net proceeds | $8,940 |
| Adjusted cost base | $12,000 |
| Capital loss | $3,060 |
| Allowable capital loss (half) | $1,530 |
If you hold identical coins bought at different prices, the ACB is an average, which the CRA capital gains guide T4037 describes. A loss on one batch can be hidden or exaggerated if the averaging is wrong, so keep the purchase records.
Which income can a crypto capital loss offset?
Only taxable capital gains. The CRA says you can deduct the allowable half of a capital loss against your taxable capital gains, and that an allowable capital loss cannot be deducted against income from other sources such as employment income.
In a year with both gains and losses, the losses reduce the gains first. If the gains are larger, only the net amount is taxed, at half. If the losses are larger, the allowable half of the excess carries to other years. The CRA page uses one half, and the Budget 2026 tax measures annex shows no change to it. Use the capital gains tax calculator to see a net result.
Gains and losses on different coins are pooled. A loss on one coin offsets a gain on another in the same year. That is the usual reason to track every disposition, not only the winners.
How do you carry a net capital loss back or forward?
If your allowable capital losses are bigger than your taxable capital gains in a year, the excess is a net capital loss. The CRA says you can carry back a net capital loss three years or carry it forward indefinitely to offset taxable capital gains. The CRA guide T4037 says to claim loss from other years on line 25300 of the return, and to request a carryback on Form T1A, completing Part 5, without amending the earlier return. For a 2025 loss it names 2022, 2023 and 2024. For a 2026 loss the same rule points to 2023, 2024 and 2025.
Here is an example with made up numbers. In 2026 you sell coins at a $9,000 capital loss and have no gains. The allowable half is $4,500, a net capital loss you can use in one of two ways.
| Choice | The gain it is applied to | Taxable gain before | Loss used | Loss left |
|---|---|---|---|---|
| Carry forward to 2027 | $6,000 gain in 2027 | $3,000 | $3,000 | $1,500 |
| Carry back to 2025 using Form T1A | $8,000 gain in 2025 | $4,000 | $4,000 | $500 |
In the carryforward case the $3,000 taxable gain in 2027 is wiped out, and $1,500 remains for later years. In the carryback case the 2025 taxable gain is cancelled by $4,000, with $500 left, and the tax paid on it for 2025 could be refunded after the CRA reassesses. Which is better depends on the rates in the years involved and whether you expect gains soon. The CRA pages we read do not set an order for applying losses from several years, so confirm the order in T4037 if you have more than one.
Our capital loss in Canada page goes through the same rules for any kind of asset.
What if you buy the coin back? The superficial loss rule
The CRA capital gains guide T4037 describes a superficial loss. It can occur when you dispose of capital property for a loss and, in the period starting 30 calendar days before the sale and ending 30 calendar days after it, you or someone affiliated with you acquires the same or an identical property. Affiliated persons include your spouse or common-law partner. The loss cannot be deducted, and you can usually add it to the adjusted cost base of the replacement property.
The CRA crypto pages do not mention this rule, and we have not found a CRA statement on how it treats two units of the same coin. Crypto is capital property for many people, so the general rule is a real risk if you sell at a loss and buy back soon. T4037 has more conditions than we show here, and whether two coins are identical is a question of fact.
Here is an example, with made up numbers, showing the effect if the rule applies.
| Step | Amount |
|---|---|
| Cost of the coins | $30,000 |
| Sold on December 10, 2026 for | $24,000 |
| Loss | $6,000 |
| The same coin repurchased on January 5, 2027 (26 days later) for | $25,000 |
| Loss denied in 2026 | $6,000 |
| Cost of the new coins ($25,000 plus $6,000) | $31,000 |
The window ends 30 days after the sale, on January 9, 2027, so the January 5 repurchase falls inside it. The loss is not gone. It waits in the higher cost of the new coins and shows up when those coins are sold.
What about coins that are lost, stolen or stuck on a failed platform?
The CRA crypto pages we read do not address lost private keys, theft, scams or platforms that stop paying out. We cannot say from a CRA source when a loss can be claimed in those cases, and we do not want to guess.
The general framework in T4037 helps with the boundaries. A capital loss needs a disposition, or a deemed one. The guide covers bad debts, and shares of a bankrupt corporation are treated as disposed of for nil, but those are rules for debts and shares, and the guide does not say crypto-assets fit them. The guide also says that losses on personal-use property are generally not deductible. Whether coins held to spend are personal-use property is not stated for crypto.
What helps in any of these situations is evidence. The CRA's books and records page asks you to export your platform activity history regularly in case the exchange stops operating, stops offering services in Canada, or you lose account access. If you cannot get the records later, proving the cost is harder.
Are business losses on crypto different?
Yes. If the CRA treats your trading as a business, the result is business income or loss, not a capital gain or loss. The CRA says a business has income when revenue exceeds expenses, and that business income or loss must be reported. A business loss is generally deducted in full against other income instead of being cut to half and limited to gains. That is why the line between a business and a capital transaction matters in both directions.
The CRA lists the factors: how often you transact, how long you hold, your knowledge of the market, the time you spend, borrowing and advertising. A one off sale can still be business income if it is an adventure or concern in the nature of trade. For the wider picture of how the two compare, see our crypto tax in Canada guide and day trading taxes.
How do you report a crypto loss on the 2026 return?
Report each disposition on Schedule 3, with the proceeds, the adjusted cost base and the outlays, even when the result is a loss. The net figure feeds the capital gains line of your return. If you have a net capital loss from 2026, the carryback is requested on Form T1A, and a loss from an earlier year is used on line 25300. A 2026 return is due April 30, 2027, or June 15, 2027 if you or your spouse have business income, with any balance owing still due April 30.
Keep records for at least six years after the last tax year they relate to: units, dates, Canadian dollar values, the platform ledgers and the wallet addresses. Our tax planning guide covers year end timing in general terms. Nothing here is advice for your own return.
Frequently asked questions
Can I deduct a crypto loss against my salary?
No. The CRA says an allowable capital loss cannot be deducted against income from other sources such as employment income. It offsets taxable capital gains only. Half of a capital loss is the allowable part. Unused amounts become a net capital loss you can carry to other years.
How long can I carry a crypto capital loss?
The CRA says you can carry back a net capital loss three years or carry it forward indefinitely to offset taxable capital gains. A carryback is requested on Form T1A without amending the earlier return. A carryforward is claimed on line 25300 of the return for the year you use it.
Does the superficial loss rule apply to crypto?
The CRA crypto pages do not say. The general rule in the capital gains guide T4037 denies a loss if you or an affiliated person acquire the same or an identical property within 30 days before or after the sale. Crypto is often capital property, so the risk is real. Ask a professional.
What if my exchange collapsed and I lost my coins?
The CRA crypto pages do not address a failed platform, so we cannot confirm when or how a loss is claimed. A capital loss generally needs a disposition. Export and keep your ledgers and statements, and get professional advice before claiming a loss.
Is a crypto trading loss a business loss?
It can be. If the CRA treats your activity as a business, the result is business income or loss, which is generally deducted in full against other income. The CRA looks at frequency, holding period, knowledge, time spent, borrowing and advertising. Most one time investors report capital losses.
Do I report a loss if I have no gains this year?
Yes. Report the disposition on Schedule 3 even if the result is a loss. A net capital loss can be carried back three years or forward without limit. If you do not report it, you may lose the ability to use it against a later gain.