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Selling crypto at a loss can offset capital gains, and half of the loss is allowable. The risk is buying the same coin back inside 30 days, which can trigger the superficial loss rule. The CRA crypto pages do not say how that rule applies to coins, so this page marks what is known and unknown.
What is tax loss harvesting?
Tax loss harvesting means selling an investment that is worth less than you paid, on purpose, so that the capital loss offsets capital gains in the same year. The loss is real money you lost on paper, and the sale is what puts it on your return. Many investors do it near the end of the year.
The CRA explains the pieces without using the name. A capital loss is the proceeds minus the adjusted cost base and selling costs. Half of it is allowable, and an allowable capital loss can be deducted only against taxable capital gains, not against income from other sources such as employment income. If the losses are larger than the gains, the difference is a net capital loss that can be carried back three years or forward indefinitely.
Crypto fits because each sale or trade is a disposition and each coin is valued as its own asset. A loss on one coin can offset a gain on another. Our crypto capital loss page covers the loss rules in more detail, and this page focuses on the timing and the buyback risk.
How does a harvested loss change the bill?
Here is an example with made up numbers. In 2026 you sold coin X for a $8,000 gain. You also hold coin Y, which cost $10,000 and is now worth $4,000. Selling Y creates a $6,000 loss. The table uses the 2026 federal and Alberta rates from the CRA rates page, with $90,000 of other taxable income, before credits.
| Line | Amount |
|---|---|
| Gain from selling coin X | $8,000 |
| Loss from selling coin Y (cost $10,000, sold for $4,000) | -$6,000 |
| Net capital gain | $2,000 |
| Taxable capital gain without the loss sale | $4,000 |
| Taxable capital gain with the loss sale | $1,000 |
| Extra tax without the loss sale, in the Alberta example | $1,220 |
| Extra tax with the loss sale | $305 |
| Tax difference | $915 |
The loss cut the taxable gain from $4,000 to $1,000, and the example tax fell by $915. The saving comes with a trade off: you no longer hold coin Y, and the loss is used up. Whether that makes sense depends on your plans, and we do not give advice. The numbers show the mechanics only.
Use the capital gains tax calculator to try your own figures, and see how much tax you pay on crypto for the rate side.
Does the superficial loss rule apply to crypto?
The CRA has not said. The superficial loss rule is in the Income Tax Act and is explained in CRA guide T4037 on capital gains. The guide says a superficial loss can occur when you dispose of capital property at a loss and, from 30 calendar days before the sale to 30 calendar days after it, you or an affiliated person buys, or has a right to buy, the same or identical property. The second condition is that you or an affiliated person still own, or have a right to buy, that property 30 days after the sale.
The section of T4037 that we read does not mention crypto, and the CRA crypto pages we read do not mention superficial losses. Crypto is capital property for many holders, so the general rule is a real risk if you sell at a loss and buy the same coin back. Whether one unit of a coin is identical to another is a question of fact that the CRA crypto pages do not answer. Treat the rule as possibly applicable and ask the CRA or a qualified professional.
Affiliated persons include you and your spouse or common-law partner, and a trust and its majority interest beneficiary, according to the guide. A repurchase by a partner can count as well as one by you.
What is the 30 day window?
The window is 61 days long: the 30 days before the sale, the day of the sale and the 30 days after. A purchase anywhere in it can matter, including a purchase made before you sold. A calendar helps, so count in code or on paper.
Example. You sell coins on December 18, 2026. The window runs from November 18, 2026 to January 17, 2027. A repurchase on December 28, 2026 is 10 days after the sale, so it falls inside. A repurchase on January 20, 2027 is 33 days after, so it falls outside the 30 day period. The guide also asks whether you still own the replacement property at the end of the 30 day period after the sale.
One practical point. The CRA capital gains guide says you report a disposition in the calendar year in which it occurs. We did not find a CRA crypto page on which day counts when a platform settles a trade, so use the date recorded in your platform history and keep it with your own notes.
What happens to a denied loss?
The guide says you cannot deduct a superficial loss when you calculate your income for the year, and the person who acquired the substituted property can usually add the loss to its adjusted cost base. So the loss is postponed, not erased, and it comes back when the replacement property is sold in a way that is not superficial.
| Step | Amount |
|---|---|
| Cost of the coins sold | $10,000 |
| Sold on December 18, 2026 for | $4,000 |
| Loss | $6,000 |
| Same coins repurchased on December 28, 2026 (10 days later) for | $4,300 |
| Loss denied in 2026 | $6,000 |
| Cost of the new coins ($4,300 plus $6,000) | $10,300 |
| If later sold for $12,000 | Gain of $1,700 |
In this example the $6,000 loss is denied in 2026 and the new coins carry a cost of $10,300. If you later sell them for $12,000, the gain is $1,700 and not $7,700. If you wanted the loss for 2026, you lost it for that year. The details in T4037 have more conditions than we show, so use this as an outline.
The guide's example property is a share. Whether the rule treats a swap into a different coin as a purchase of identical property is unknown, because the CRA has not addressed it. Many people avoid the question by keeping a gap of more than 30 days, which gives a clear position, but we cannot say what the CRA accepts for a similar but different coin.
How do you carry a loss back or forward?
If your allowable capital losses are more than your taxable capital gains, the excess is a net capital loss. The CRA says it can be applied to taxable capital gains of the three preceding years or carried forward to any future year. To claim a net capital loss from another year, you use line 25300 of the return. To carry a loss back, you complete Part 5 of Form T1A, Request for Loss Carryback, and the guide says not to amend the earlier return.
That matters for harvesting. If you realize a loss in December 2026 and have no 2026 gains, the allowable half can still help against 2023, 2024 or 2025 gains, or against future gains. The guide we read does not settle the order of applying several years, so check it if you have more than one. Our capital loss page covers the same rules for any asset.
Business losses are different. If the CRA treats your trading as a business, the result is business income or loss, and the capital loss rules do not apply in the same way. Read day trading taxes for the tests.
What records support the claim?
The CRA books and records page for crypto-assets lists what to keep: units, date and time, Canadian dollar value, the nature of each transaction and the other party, wallet addresses, and opening and closing balances with the cost of the opening balance. For a harvested loss, the records that matter most are the purchase history, which sets the cost, the sale date and proceeds, and any purchase in the 30 days before or after.
The CRA says to keep records for at least six years from the end of the last tax year they relate to. Report the loss on Schedule 3, line 7 for crypto-assets, with proceeds on line 15200 and the net result on line 15301, as T4037 describes. Our 2026 crypto return page walks through that.
This page is information only. We do not prepare returns, we do not represent the CRA or any organization, we do not give investment advice and we do not guarantee that the figures fit your case. The coins and prices are made up.
Frequently asked questions
Can you do tax loss harvesting with crypto in Canada?
You can sell crypto at a loss, and the CRA treats that as a disposition that creates a capital loss. Half of it is allowable against taxable capital gains. The open question is the superficial loss rule if you buy the same coin back, which the CRA crypto pages do not address.
Does the superficial loss rule apply to crypto?
The CRA crypto pages do not say. The general rule in guide T4037 denies a loss if you or an affiliated person acquire the same or identical property from 30 days before to 30 days after the sale and still own it after that period. Crypto is capital property for many holders, so ask a professional.
Is there a wash sale rule in Canada?
Canada has the superficial loss rule, which works in a similar way. It covers the 30 days before and after a sale, includes purchases by affiliated persons such as a spouse, and adds a denied loss to the cost of the replacement property. Nothing on the CRA crypto pages says how it treats coins.
Can a crypto loss reduce my salary income?
No. The CRA says an allowable capital loss can be deducted only against taxable capital gains, and not against income from other sources such as employment income. Unused losses form a net capital loss that can go back three years or forward without a time limit.
How long must I wait to buy a coin back after a loss?
The general rule looks at the 30 calendar days before and after the sale, so a repurchase on day 31 or later falls outside it, subject to the other conditions in the guide. We cannot confirm how the CRA applies the rule to crypto, so a gap does not settle the question.
Where do I report a crypto loss?
On Schedule 3, line 7 of Part 3 for crypto-assets, with total proceeds on line 15200 and total gain or loss on line 15301. If you have a net capital loss, you can carry it back with Form T1A or forward with line 25300. Business losses go through the business income forms.