Hi, I would like to ask if I could claim a capital loss on the crypto I recently gave away as a gift since its value decreased from the day I purchased it? Thank you 🙂
Can I claim capital loss on a crypto gift ( I disposed) that had its value decreased since the day of the purchase?
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Hi Elnyara,
Great question — and one that comes up often with cryptocurrency holders.
1. Yes, gifting crypto is considered a “disposition” for tax purposes
Under CRA rules, cryptocurrency is treated as capital property (unless you are running a business of trading). When you give crypto away as a gift, the CRA considers this a taxable disposition — meaning you are treated as if you sold it at its fair market value (FMV) on the date of the gift.
2. Can you claim a capital loss?
Yes — if the FMV at the time you gifted the crypto is lower than what you originally paid, you have realized a capital loss.
Example:
- You bought crypto for $5,000
- On the gift date, the FMV was $2,000
- Your capital loss = $3,000
- Your allowable capital loss (the amount you can claim) = 50% of that = $1,500
3. How this loss can be used
Allowable capital losses can be applied:
- Against taxable capital gains in the same year
- Carried back 3 years
- Carried forward indefinitely to offset future gains
They cannot be applied against other income (like salary).
4. Important considerations
- CRA requires good documentation: proof of original cost, FMV on the gift date, and transaction records.
- If your crypto activities are frequent/high-volume, the CRA may classify them as business income, which changes the tax treatment.
- Gifting crypto is not the same as donating publicly traded securities — no special exemption applies.
Bottom line
If you held the crypto as an investment (capital property) and you can document both your cost and the FMV at the gift date, then yes — you may claim the capital loss on your tax return.
If you’d like help calculating the loss or confirming the correct reporting, feel free to reach out — my team and I would be happy to assist.
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