Kraken activity is reportable to the CRA like any other crypto, and no Canadian slip will do the work for you. The plan is short. Export every ledger you can, match transfers, convert values to Canadian dollars, work out gains with the adjusted cost base and keep the files for six years. Exchanges rename menus and change export tools, so check the current Kraken help pages for the exact steps. What follows is the method that stays the same.
What triggers tax
The CRA treats crypto-assets as property. Selling for cash, swapping one coin for another, converting and paying for goods with crypto are all dispositions, valued in Canadian dollars when they happen. Buying and holding are not, and neither is moving coins between wallets you own.
Trading pairs matter here. Buying ETH with BTC is a disposition of the BTC. It gives you proceeds equal to what the ETH was worth in Canadian dollars, and it sets the ETH’s cost at that same figure.
Ledgers and trade histories
Many exchanges keep two kinds of record. A trade history lists executed orders. A ledger lists every movement in and out of your balances, including deposits, withdrawals, fees and rewards. For tax you want the ledger, because it shows events a trade list leaves out.
Request both for every year, oldest first, and save originals untouched. If a long range fails, split it into shorter periods and check the edges for gaps or overlap. Write down the date you downloaded each file.
An API key is the other option. Give it read-only permission, leave withdrawals and trading off, and delete it after you file. Then compare what it pulled against a file for one full year.
Margin, futures and other products
Some accounts used more than spot trading. Margin, futures or lending products can create gains, losses, interest and fees that don’t fit the simple buy and sell pattern. The CRA’s crypto pages don’t set out a rule for each product, and the treatment can depend on investor or business status.
If you traded derivatives or on margin, get advice on the classification before you file. Keep every statement, since these products can produce many small entries.
Matching transfers and fixing balances
A withdrawal to your own wallet is not a sale. Software treats it as one unless it can pair it with a deposit. Import the wallet address or the other platform’s history, then mark the pair as a transfer. Keep the transaction ID and both addresses for big moves.
A negative balance on import means a coin left without the tool seeing it arrive. Find the first date it went below zero and look for a missing deposit or reward just before it. Also watch time zones. A file in UTC places a 9 pm Toronto trade on December 31 in January, which can change the tax year.
Staking rewards and income
Rewards are generally income when received, valued in Canadian dollars at that time, and that value becomes their cost. The CRA’s mining and staking page states this. If you receive 0.02 of a coin worth $3,000 each, that’s $60 of income and a $60 cost base for those units.
Later sales use the $60 as the starting cost. Leave out the income step and you overstate the gain when you sell. Treat each payout the same way, even when payouts are small and frequent.
Average cost, with a worked year
For identical units the CRA uses the average cost. You buy 0.5 BTC for $30,000 and 0.3 BTC for $21,000, including fees. The pool is 0.8 BTC costing $51,000, or $63,750 per coin.
You sell 0.4 BTC for $30,000 and pay a $60 fee. Those units carried $25,500. The gain is $30,000 minus $25,500 minus $60, or $4,440, and $2,220 is taxable. In the band from $58,523 to $107,785, the combined federal and Ontario rate before surtax and premium is 29.65%, so about $658 of tax on that portion.
Then you swap 0.1 BTC for another coin when 0.1 BTC is worth $8,000. The 0.1 BTC carried $6,375, so the gain is $1,625. That new coin starts at a cost of $8,000, and the pool keeps 0.3 BTC costing $19,125.
You can’t choose which lot you sold, and some tools default to first-in, first-out, so check the setting. Try the capital gains tax calculator and the income tax calculator with your own figures.
Losses and the 30-day window
Half of a capital loss can offset taxable gains. The superficial loss rule denies a loss if you or an affiliated person, such as a spouse, buys identical property within 30 days before or after the sale and still holds it. You sell a coin at a $2,000 loss on June 2 and rebuy on June 20. The loss can’t be claimed, and the $2,000 adds to the cost of the new coin.
Because crypto trades around the clock, check every account and wallet for purchases near each loss sale.
Foreign property, records and filing
File Form T1135 if the total cost of your specified foreign property was over $100,000 in Canadian dollars at any time in the year. The test uses cost, not market value, and counts all foreign holdings together. Whether crypto on a given platform counts depends on the CRA’s current view, so read the form guide if you’re close.
The CRA asks you to keep each transaction’s type and units, date and time and Canadian dollar value, plus wallet addresses and balances, for at least six years after the end of the last tax year they relate to. Use two storage locations.
Before filing, reconcile each coin’s year-end balance and compare bank transfers with exchange deposits. Enter the net on Schedule 3. The deadline is April 30, or June 15 if self-employed, though balances are due April 30. Late filing with a balance owing costs 5% plus 1% per full month up to 12. Our late filing penalty guide covers relief. Related tools: the Marginal Tax Rate & Tax Brackets calculator, plus all our tax calculators.
Sources
- CRA, Crypto-asset guide
- CRA, Income from crypto-asset transactions
- CRA, Crypto-asset books and records
- CRA, Mining and staking
- CRA, Form T1135
Common questions
Is trading one coin for another taxable?
Which Kraken record is best for taxes?
Do staking rewards count as income?
When is Form T1135 required?
Last reviewed: . Figures come from the official sources listed above. How we check the numbers and our editorial policy.