Get an estimate of your tax bill with our free Bitcoin and crypto tax calculator built for Canadian investors.
Our Bitcoin and crypto tax calculator is designed to help Canadian investors estimate their tax liability — both for individual trades and their yearly income!
To use our free crypto tax calculator, you’ll need the following information.
Once you’ve entered your information, we’ll be able to estimate the tax bill with the click of a button.
Trying to keep track of the information you need to file your taxes can be difficult if you’re using multiple wallets and exchanges. If you’ve transferred your crypto between exchanges or bought the same cryptocurrency multiple times, it may be difficult to calculate your average cost basis for your cryptocurrency.
CoinLedger can help. The platform automatically connects with hundreds of exchanges like Coinbase and blockchains like Ethereum. You’ll be able to import your transactions and generate a comprehensive tax report in minutes.
More than 500,000 crypto investors worldwide use CoinLedger to take the stress out of tax season. Get started with a free account today.
Our free tool uses the following formula to calculate your capital gains and losses.
Your Sales Price is the fair market value of your crypto at the time of disposal. Your Purchase Price is your average cost for acquiring your cryptocurrency.
In Canada, cryptocurrency is subject to capital gains and income tax.
When you dispose of cryptocurrency, you’ll incur a capital gain or loss depending on how the price of your crypto has changed since you originally received it. Examples of disposals include selling your crypto, trading your crypto for another crypto, and gifting your crypto.
When you earn cryptocurrency, you’ll recognize ordinary income based on the fair market value of your crypto at the time of receipt. Examples include staking and referral rewards.
Remember, only 50% of your capital gains are considered taxable income!
If your cryptocurrency activity rises to the level where it is considered a business, your gains may be considered business income rather than capital gains. This means that 100% of your gains will be subject to tax — which could lead to a significantly higher tax liability.
Here are a factors that the CRA may consider when determining if your gains should be considered capital gains or business income:
The CRA determines how transactions are taxed on a case-by-case basis. If you’re unsure whether your cryptocurrency activity rises to the level of a business, you should reach out to your tax professional.
The tax rate in Canada on cryptocurrency income and capital gains ranges from 15-33% depending on your income bracket.
Remember, there is no flat tax for all of your income. Instead, you’ll pay different tax rates as you progress through each bracket. For example, a taxpayer who earns $60,000 in income pays 15% on the first $50,197 of income and 20.5% on the final $9,803 of income.
Your purchase price for your cryptocurrency is your average cost for acquiring it. Here’s an example to better understand how this works.
Brianna buys BTC for $10,000.
Later, she buys BTC for $20,000
Brianna's Purchase Price for BTC is $15,000 per coint.
Your tax rate varies depending on your annual income for the year.
Fees directly related to acquiring your crypto can be added to your purchase price. Meanwhile, fees directly related to disposing of your crypto can be subtracted from your sales price. In either case, fees reduce your total capital gains.
Income from cryptocurrency and other sources is subject to provincial tax. Our crypto tax calculator calculates relevant provincial tax rates based on your location.
Capital losses can offset your capital gains for the year. If you have a net loss for the year, you can carry it forward to offset gains in future tax years or carry it back to any of the three preceding tax years.
Trading one cryptocurrency for another is considered a disposal event subject to capital gains tax. To calculate your capital gain or loss, you’ll need to know your purchase price of the cryptocurrency you’re trading away and the fair market value of that crypto at the time of disposal (sales price). The difference between the two will be your total capital gain.
There is no way to legally evade your cryptocurrency taxes. Here are a few strategies that can help you reduce your crypto tax bill legally.
In Canada, income from cryptocurrency is taxed between 15-33%. To find your taxable income for the year, you can total 100% of your cryptocurrency income and 50% of your crypto capital gains.
Cryptocurrency exchanges operating in Canada are subject to FINTRAC and anti-money laundering regulations. In addition, tax agencies around the world use data matching to track transactions on blockchains like Bitcoin and Ethereum.
There is no way to evade your cryptocurrency taxes legally. However, strategies like tax-loss harvesting can help you legally reduce your tax bill.
Trading one cryptocurrency for another is considered a taxable disposal. You’ll incur a capital gain or loss based on how the value of your crypto has changed since you originally received it.
In Canada, cryptocurrency losses can be used to offset capital gains for the year.
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