Canada
Canada Revenue Agency (CRA)
Rules Implemented
Superficial Loss Rule (Mandatory)
Losses denied if identical property reacquired within 30 days before or after disposal, and still owned 30 days after. Uses CRA proration formula: MIN(S, P, B) / S — partial denial when only a fraction is reacquired. (ITA Section 54, Subsection 40(2)(g)(i))
ACB Adjustment for Denied Losses
Denied superficial losses are added back to your Adjusted Cost Base under Subsection 53(1)(f), preserving the loss for future disposals. The loss is deferred, not eliminated.
50% Capital Gains Inclusion Rate
50% of net capital gains are included in taxable income. Capital losses can offset capital gains in the current year or be carried back 3 years / forward indefinitely.
Reports Generated
- Schedule 3 (Capital Gains and Losses)
- T1135 (Foreign Income Verification)
- ACB Summary (transaction-by-transaction)
- Superficial Loss Report (with CRA proration details)
- Income Report
- Tax Audit Report (full provenance trail)
How ACB Works
The Adjusted Cost Base method pools all acquisitions of the same asset together. Each purchase increases the total ACB; each disposal reduces it proportionally using the weighted average cost before the disposal.
Example:
| Date | Action | Quantity | Price | ACB/Unit |
|---|---|---|---|---|
| Jan 15 | Buy 1.0 BTC | 1.0 | $50,000 | $50,000 |
| Mar 10 | Buy 0.5 BTC | 0.5 | $60,000 | $53,333 |
| Jun 20 | Sell 0.8 BTC | -0.8 | $65,000 | $53,333 |
Gain on disposal: (0.8 × $65,000) - (0.8 × $53,333) = $9,333 Taxable (50% inclusion): $4,667
Superficial Loss Rule
If you sell cryptocurrency at a loss and reacquire the same asset within a 61-day window (30 days before through 30 days after the sale), and you still own the asset 30 days after the sale, the CRA denies some or all of the loss.
CRA Proration Formula:
- S = Units sold | P = Units purchased in window | B = Units owned at day 30
- Denied Loss = |Total Loss| × MIN(S, P, B) / S
This means if you only repurchase a fraction of what you sold, only that fraction of the loss is denied — not the entire amount.
PrivateACB detects this automatically. The Superficial Loss Report shows every flagged transaction with the 61-day window dates, S/P/B values, proration ratio, denied amount, and adjusted ACB.
FX Rate Sources
Canadian dollar exchange rates are sourced from the Bank of Canada daily noon rates. For USD conversions, Federal Reserve (FRED) rates are also available as an alternative source. PrivateACB uses a three-tier price resolution system: imported price → CoinGecko → manual entry.
Regulatory References
- Income Tax Act, Section 54 — Definition of “superficial loss”
- Subsection 40(2)(g)(i) — Denial of superficial loss from capital gain calculation
- Subsection 53(1)(f) — ACB increase for denied superficial loss amount
- Income Tax Folio S3-F3-C1 — Replacement Property
- Guide T4037 — Capital Gains (CRA)
- CARF (2026) — Crypto-Asset Reporting Framework. Starting January 1, 2026, Canadian exchanges must report user data to the CRA. First filings due 2027.