- Crypto ETFs maintain precise crypto, so that they’re a extra direct strategy to achieve publicity to crypto in comparison with shares in a public firm engaged in crypto actions.
- Crypto ETFs are eligible for tax-advantaged accounts just like the tax-free savings account (TFSA), registered retirement savings plan (RRSP) and first home savings account (FHSA). (Extra on crypto and taxes under.)
It’s tax season—right here’s what that you must know
The Canada Income Company (CRA) considers cryptocurrencies as commodities, the acquisition and sale of which can lead to a capital gain or loss. Consequently, when you offered crypto in 2024, you might both owe capital positive factors tax or have a capital loss that you should use to offset different capital positive factors.
Right here’s how capital positive factors tax works in Canada, together with for crypto: 50% of the capital achieve is added to your revenue and taxed at your marginal tax rate. Learn MoneySense’s information to crypto taxes in Canada, and my article about crypto ETF taxes in Canada.
Right here’s an instance: Let’s say to procure 1 bitcoin for $62,722 on Jan 8, 2024, and offered it for $144,733 on Dec. 14, 2024. You’d owe $12,301.65 in capital positive factors tax. Right here’s the calculation:
Trudeau resigns—resulting in capital positive factors tax uncertainty
Calculating your capital positive factors tax could possibly be fairly simple so long as you may have information of all of your transactions. Nonetheless, in case you have over $250,000 in capital positive factors, issues could get extra sophisticated.
In case your capital positive factors are over $250,000, your inclusion charge for the positive factors above $250,000 could possibly be two-thirds (66.67%). Though this increased charge was launched in 2024, there stays uncertainty on whether or not and the way it is going to be carried out in 2025 and past.
Why? The capital positive factors tax modifications had not but handed into legislation when Prime Minister Justin Trudeau introduced his resignation and prorogued Parliament till March. Nonetheless, the Finance Division has acknowledged that in prorogation, the CRA will proceed to manage the modifications. Right here’s what we all know up to now about capital gains tax changes during prorogation.
Crypto value swings are frequent
The costs of bitcoin, ethereum and different cryptocurrencies are speculative and topic to excessive swings. Whereas the long-term pattern for crypto appears robust, buyers ought to understand that deep and sudden bear markets are a part of crypto’s historical past—and must be anticipated sooner or later.
As at all times, train warning and solely take into account crypto if it aligns along with your monetary objectives, time horizon and threat profile. Make investments solely as a lot cash as you’re prepared to lose, and maintain a lookout for crypto scams.