Crypto Losses, Carry-Overs and the 30-Day Rule

When crypto is sold for less than it cost, the result is a capital loss in the tax sense. According to the Canada Revenue Agency (CRA), allowable capital losses can be deducted only against taxable capital gains, not against other income such as wages. That one limit shapes everything else in this article. A loss does not lower a salary or a pension. It sits beside gains and reduces them. A person with a loss and no gains in the same year therefore has nothing to set it against for the moment, and that raises the practical question of what happens to the unused loss. The answer is a carry-over, covered next, and it is the reason good records matter long after the sale.

The unused part of a loss is called a net capital loss. According to the CRA, a net capital loss can be carried back three years or carried forward indefinitely. Carrying back means applying it against taxable capital gains reported in an earlier year. Carrying forward means holding it for later years with no end date. Net capital losses from other years are claimed on line 25300, according to the CRA, while business losses are treated differently and are reported in full. Because a loss may be used years after the sale, the records behind it matter: the date of each disposal, what the property cost and what it fetched must still be readable when the claim is made.

Take a made-up case. Marcus sells a crypto asset at a loss in the autumn. A few days later he decides he still wants to hold the same asset, so he acquires it again. At filing time he reports the loss and expects it to count. The CRA's superficial loss rule may stop that. A loss is not deductible if the taxpayer, or a person affiliated with the taxpayer, acquires identical property within 30 days before or after the sale and still holds it 30 days after the sale. Marcus's quick repurchase falls inside that window, so the loss is denied for that year rather than lost forever. The sale and the repurchase were separate events, but the rule looks at them together.

The denied loss does not vanish. According to the CRA, it is usually added to the cost base of the replacement property, so it can show up later when that property is finally sold. Several traps follow. One is forgetting the affiliated person, because a spouse or a company the taxpayer controls can trigger the rule too. Another is counting the 30 days from the wrong date. A third is mixing up the two kinds of loss: the rule on line 25300 for net losses of other years is a separate matter from the superficial loss rule. Mistaking one for the other leads to claims in the wrong place.

The CRA pages used for this article leave one question open. They do not say whether crypto counts as identical property for the superficial loss rule. A careful reader keeps that gap in view and does not fill it with a guess. Useful checks are plain ones. Was any identical property acquired in the 60-day span around the sale? Did anyone affiliated with the taxpayer acquire it? Are the sale date, cost and proceeds written down for every disposal? Were losses from earlier years recorded, with the year each one arose? Those answers come from the taxpayer's own records and the CRA's public pages, not from a forum or a screenshot.

The CRA pages named below are the place to read the current wording of these rules, because tax guidance is revised. This page does not decide how any person's losses should be reported, whether a given repurchase triggers the rule or how crypto should be classified for a particular taxpayer. It is general education, not tax, legal or financial advice. For a specific return, rely on the CRA's own publications and, where needed, a qualified professional. Every dated rule here is attributed to the CRA and should be checked on its page before use. Rules and forms are revised from time to time, and a page read last year may no longer match the current version. A reader who files late or amends an older return should read the version that applies to that year.

• Allowable capital losses offset only taxable capital gains, and unused net losses can be carried back or forward
• Under the superficial loss rule, a loss can be denied when identical property is reacquired in the 30-day window
• The CRA pages reviewed do not say whether crypto counts as identical property for this rule