ZenLedger now offers crypto tax forms for Canada! In Canada, the CRA treats cryptocurrency as property, and gains from it are taxed either as business income or capital gains under income tax rates. Thus, establishing whether or not your transactions are part of a business is important (including day traders). Only 50% of capital gains are taxable, while 100% of business income is taxable.

ZenLedger offers the form CA Schedule 3 for Canadian taxpayers to file their crypto taxes. When you enter all of your data into ZenLedger and resolve any issue that arise within your account, you will be able to generate this form and use it for filing your crypto taxes.

Step 1: Click the gear icon in the upper-right corner of your account and click Settings.

Step 2: Click Tax Settings on the left side of the screen.

Step 3: Scroll to the bottom and make sure that your country is selected as Canada. Update it using the drop-down menu and click Save if necessary.

Step 4: Now go to the Taxes tab and you will see you're Canada Tax Form available in the Tax Forms box. Click View to review CRA Schedule 3.

Step 5: When you are ready, click Download Form and save the file to your computer to use in filing your crypto taxes.

Canada does not have short-term or long-term capital gains tax rates. Crypto capital gains are taxed at the Federal Income Tax rate and the Provincial Income Tax rate. You pay 50% tax on your total capital gains as an individual crypto holder, while businesses and professional day traders will pay 100%.

Here are the 2022 income tax packages with rates for each province and territory, which are calculated in the same way as federal tax.

50% of your capital gains are taxable in Canada as an individual, and taxpayers may use up to 50% of crypto capital losses to offset capital gains.

Instances in which you will trigger Capital Gains Tax in Canada include:

Crypto is not considered legal tender in Canada, thus when taxpayers receive goods or services in exchange for crypto, they will have a capital gain or loss on the spent crypto's change in value since they acquired it.

You won't pay any Capital Gains Tax on any capital losses from crypto and you can offset your capital losses against your crypto capital gains for the tax year to reduce your overall tax liability.

The 50% rule for capital gains also applies equally to your capital losses and this means you can only offset half your net capital loss in a given tax year. If you have more losses after doing this in a given year, you may carry this figure over to future financial years to offset against future gains.

When calculating crypto capital gains and losses, Canada uses the adjusted cost basis method. This method takes into consideration the cost of the asset along with any fees associated with the transaction. If you have multiple identical assets, the CRA says to use the average cost basis method.

Ordinary Income Tax is applicable when you earn crypto in Canada, such as being paid in crypto. This is determined by the fair market value of the crypto at the time you earned it. This also includes earnings from activities like staking and mining rewards. 100% of your ordinary income obtained from crypto is considered taxable income in Canada.

Examples of crypto transactions that would be considered income include:

Crypto capital gains in Canada are taxed at the same rate as Federal Income Tax, so the table above applies to both income and capital gains from crypto.

These types of transactions will not have a taxable impact in Canada:

If you have any questions about your tax form for crypto in Canada, please don't hesitate to reach out to our support team in the live chat!

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