Canada NFT Tax Guide 2025

CRA Treatment of NFTs

CRA treats NFTs as property, with tax treatment depending on use:

• Investment: Capital gains (50% inclusion)
• Business/trading: Business income (100% taxable)

Capital Gains (Most Common)

Calculation

Capital Gain = Proceeds - ACB - Expenses

Taxable Amount = Capital Gain × 50%

Example

• Buy NFT: $2,000 CAD (+ $100 gas)
• Sell NFT: $8,000 CAD (- $200 fees)
• ACB: $2,100
• Proceeds: $7,800
• Capital gain: $5,700
• Taxable gain: $5,700 × 50% = $2,850

ACB (Adjusted Cost Base)

Track ACB for each NFT or NFT collection:

• Purchase price
• Gas fees (acquisition)
• Marketplace fees (acquisition)

For identical NFTs, use average cost method (like crypto).

Minting NFTs

Casual creator:

• Minting = not taxable
• ACB = minting cost + gas
• Selling = capital gains (50% inclusion)

NFT business:

• Sales = business income (100% taxable)
• Deduct business expenses
• Report on Form T2125

NFT Royalties

Creator royalties = business or investment income:

• 100% taxable (not 50% like capital gains)
• Report on Line 10400 (business) or Line 12100 (investment)
• If business: can deduct expenses

NFT Airdrops

Receiving NFT airdrops = income:

• Income = FMV in CAD when received
• Report as business or investment income
• ACB for future sale = income amount

Superficial Loss Rule

Selling NFT at loss and repurchasing within 30 days:

• Loss is denied
• Loss added to ACB of new NFT
• Applies to you and affiliated persons

How to Report on T1

Capital Gains (Schedule 3)

1. List each NFT disposal
2. Calculate gain/loss
3. Apply 50% inclusion rate
4. Total flows to Line 12700

Business Income (Form T2125)

If trading NFTs as business:

• Gross income from NFT sales
• Deduct cost of goods sold
• Deduct business expenses

Record Keeping

Keep records for 6 years:

• Transaction dates and times
• CAD values
• Gas fees and marketplace fees
• ACB calculations

Tools

• Koinly - ACB tracking
• TokenTax - CRA reports

Common Mistakes

1. Not tracking ACB: Required for accurate gains
2. Using FIFO instead of ACB: Canada requires average cost
3. Forgetting 50% inclusion: Only half of gains taxable
4. Ignoring superficial loss rule: 30-day rule applies

FAQs

Are NFTs taxed differently than crypto?

No. Both are property with identical tax treatment.

Can I use FIFO for NFTs?

No. Canada requires ACB (average cost) method.

What if I trade NFTs frequently?

May be classified as business income (100% taxable, no 50% inclusion).