Denied Crypto Loss: How It Is Added to ACB (Canada)

17 October 2026 · en-CA · Educational information · No affiliate links

Educational information only. Not tax, legal or investment advice. We are not the CRA and are not affiliated with it. Check canada.ca and consider a qualified Canadian tax professional. Sources read October 17, 2026. Anything marked expected should be re-checked (re-check planned December 1, 2026). Examples use made-up numbers. This page contains no affiliate links.

Short answer: The CRA says that if you have a superficial loss you cannot deduct it when calculating income for the year, but if you are the person who acquires the substituted property, you can usually add the amount of the loss to the adjusted cost base (ACB) of that property. That either reduces your later capital gain or increases your later capital loss.

Made-up example

• You bought 1 coin for $25,000 and sold it on December 15 for $20,000: loss $5,000.
• You buy 1 coin on December 29 for $20,000 and still hold it on January 14: the $5,000 is a superficial loss, so the December loss is nil for now.
• ACB of the replacement coin: $20,000 + $5,000 = $25,000 ("usually", per the CRA).
• You later sell the replacement coin for $27,000: gain of $2,000 ($27,000 - $25,000), instead of $7,000 without the addition. The earlier loss is therefore recovered through the lower later gain.

Who gets the addition

The CRA's wording says "if you are the person who acquires the substituted property". If an affiliated person (for example your spouse) bought it, the addition is to their cost base, not yours (our reading of the CRA wording; section 53(1)(f) wasn't re-read by us). See spouse and affiliated persons.

Not added to ACB

The CRA says that when a corporation, partnership or trust disposes of non-depreciable capital property, the loss isn't added to the cost of the transferred property but is deferred.

FAQ

What if I only buy back part of what I sold? The CRA pages we read don't give the partial calculation; see "could not verify".

Do I report the denied loss? Reporting steps weren't covered by the pages we read.

What we could not verify

• The partial superficial loss formula (not read from a primary source).
• Sections 40(2)(g)(i) and 53(1)(f) of the Act (loss nil, and addition to cost) were confirmed by our researcher's reading of laws-lois.justice.gc.ca; we did not re-read them in full ourselves.
• How the CRA applies ACB averaging for identical crypto units (not read for crypto).
• Reporting mechanics on Schedule 3 for a denied loss.

Sources (official)

• CRA, Capital losses (page modified February 5, 2026 per our researcher's check; examples refer to tax year 2025) — https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-12700-capital-gains/capital-losses-deductions.html (read in full October 17, 2026)
• Department of Justice Canada, Income Tax Act, s. 54 (definitions, "superficial loss"; Act current to 2026-09-30, last amended 2026-06-18) — https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-54.html (read in full October 17, 2026)