How to Complete CRA Schedule 3 for Capital Gains: Crypto and Losses

To complete CRA Schedule 3 for capital gains, list each capital property you disposed of during the year in the section that matches the property type, enter the proceeds of disposition, the adjusted cost base, and your outlays and expenses for each, total the gains and losses, apply the one-half inclusion rate, and carry the taxable capital gain to line 12700 of your T1. For the 2025 tax year, the return is due April 30, 2026.¹

Which Section of Schedule 3 to Use

Schedule 3 is divided by property type, and each disposition goes in the section that matches what you sold:

Publicly traded shares, mutual fund units, and similar securities held outside registered accounts.
Bonds, debentures, promissory notes, Treasury bills, and crypto-assets.
Qualified small business corporation shares.
Qualified farm or fishing property.
Real estate other than a principal residence, including rental property and vacant land. Depreciable rental buildings need extra care because part of the proceeds can be recaptured as ordinary income rather than treated as a capital gain.
Personal-use property such as vehicles, furniture, or a cottage. You only report a gain when proceeds exceed $1,000.
Listed personal property — a narrower category for collectibles like art, jewelry, rare books, stamps, and coins.

All of these assume you held the property as an investment or for personal use. If your activity looks more like a business — flipping properties or day-trading — the CRA can treat the profit as fully taxable business income reported elsewhere, not as a capital gain on Schedule 3.²

The Three Numbers You Need for Every Asset

Before you write anything on the form, pull together three figures for each property:

Proceeds of disposition — usually the sale price, or compensation received if the property was destroyed, expropriated, or stolen.
Adjusted cost base (ACB) — the original purchase price plus capital expenditures such as additions or improvements, and acquisition costs like legal fees. Routine maintenance and repairs do not count.
Outlays and expenses — direct selling costs such as brokerage commissions, legal fees, and real estate agent fees.³

For securities sold through a Canadian brokerage, most of these numbers show up on your T5008 slip. Box 20 reports a cost amount, but it may not match your true ACB if you bought the same security in more than one lot at different prices. Verify against your own records before relying on the slip.⁴

Foreign Currency Transactions

If the asset was bought or sold in a foreign currency, convert both the proceeds and the ACB into Canadian dollars using the Bank of Canada exchange rate for the date of each transaction. Because the buy and sell dates almost always carry different rates, the currency move itself can create part of your gain or loss. Keep documentation of the rate you used.

How the Calculation Works

For each row, subtract the ACB and the outlays and expenses from the proceeds. The result is the capital gain or loss on that disposition. The form is organized in five columns: year of acquisition, proceeds, ACB, outlays and expenses, and the resulting gain or loss.²

After totalling gains and losses across every category, apply the inclusion rate. For 2026 that rate is one-half, so 50% of your net capital gain becomes your taxable capital gain. The proposed increase to two-thirds for gains above $250,000 was cancelled by Prime Minister Carney in March 2025, so the 50% rate applies to the full amount regardless of size.⁵

The taxable capital gain from the bottom of Schedule 3 flows to line 12700 of your T1, where it combines with your other income.⁶ NETFILE-certified software handles that transfer automatically.

Reporting a Principal Residence Sale

Selling your home is one of the most common places filers slip up. Even when the gain is fully tax-free under the principal residence exemption, you still have to report the sale on Schedule 3 and file Form T2091(IND) to designate the property. Skip this step and the CRA can deny the exemption altogether.⁷

If the home was your principal residence for every year you owned it (or every year except one), only page 1 of Form T2091(IND) is needed. If it wasn’t your principal residence for some of those years, the full form calculates the taxable portion. And if part of the home was used to earn income, such as a rental suite, split the selling price and the ACB between the personal and income-producing portions and report the income-producing gain on line 13800 of Schedule 3.

This reporting requirement has applied since the 2016 tax year. If you forgot to make the designation, you can ask the CRA to amend the return, but a late-designation penalty may apply.

Cryptocurrency Dispositions

If you aren’t running a trading business, crypto dispositions are capital events. Selling crypto for cash, swapping one token for another, and using crypto to pay for goods or services all count, and all go in the section labelled “Bonds, debentures, promissory notes, crypto-assets, and other similar properties.”⁸

The math is the same as any other property: proceeds minus ACB minus outlays. For crypto, the ACB is normally the weighted average cost of all units of that particular token. If you bought Bitcoin at several prices over the year, average those costs rather than matching a specific purchase to each sale. Keep dated records of every transaction with the number of units, the Canadian-dollar value at the time, the wallet addresses involved, and your beginning and ending balances for each token each year.

The Superficial Loss Rule

Here’s a trap that catches a lot of investors. If you sell an investment at a loss and then buy back the same or an identical property within 30 calendar days before or after the sale, the CRA denies the loss. The rule also applies when an affiliated person, such as your spouse or a corporation you control, buys the property during that 61-day window.⁹

The denied loss isn’t lost forever. It’s added to the ACB of the replacement property, which reduces the gain (or increases the loss) when that replacement is eventually sold.¹⁰ If you’re relying on the loss to offset a current-year gain, you have to wait. To harvest a loss cleanly, don’t repurchase the same holding until at least 31 days have passed, and make sure your spouse isn’t buying it either.

Using a Net Capital Loss

When your allowable capital losses for the year are greater than your taxable capital gains, the excess becomes a net capital loss. You can’t apply it against employment or business income, but you can carry it back up to three years to recover tax paid on prior capital gains, or carry it forward indefinitely to offset future gains.⁹

To carry a loss back, file Form T1A with the return for the year the loss arose.¹¹ One ordering rule matters: losses from earlier years must be used before losses from later years. If you have unused losses from 2022 and 2025, the 2022 amount is applied first.

The Lifetime Capital Gains Exemption

If you sell shares of a qualified small business corporation or qualified farm or fishing property, some or all of the gain may be sheltered by the lifetime capital gains exemption. The base limit was raised to $1.25 million effective June 25, 2024, with inflation indexing resuming in 2026.¹²

The property has to meet specific conditions. For small business corporation shares, the corporation must be a Canadian-controlled private corporation using substantially all of its assets in an active business carried on primarily in Canada, and holding-period rules require that you or a related person owned the shares throughout the 24 months before the sale. The gain is still calculated on Schedule 3; the exemption itself is claimed on line 25400. It is cumulative over your lifetime, so every dollar claimed reduces what’s available for future dispositions.¹³

Records to Keep

Keep every supporting document for at least six years from the end of the tax year it relates to, whether you filed online or on paper.¹⁴ For capital gains, the records that matter most are purchase confirmations, T5008 slips, brokerage statements, real estate closing documents, and receipts for any capital improvements added to the ACB. If the CRA reviews your return and you can’t produce documentation for a claimed cost or expense, they can deny it and reassess with additional tax and interest. Six years is the floor; for assets you still hold, keeping the original purchase records indefinitely is safer, because you’ll need them whenever the sale finally happens.¹⁵

1
Canada Revenue Agency. Filing Due Dates for the 2025 Tax Return
2
Canada Revenue Agency. Completing Schedule 3
3
Canada Revenue Agency. Definitions for Capital Gains
4
Canada Revenue Agency. T5008 Statement of Securities Transactions
5
Office of the Prime Minister. Prime Minister Carney Cancels Proposed Capital Gains Tax Increase
6
Canada Revenue Agency. Line 12700 – Taxable Capital Gains
7
Canada Revenue Agency. Principal Residence
8
Canada Revenue Agency. Reporting Your Capital Gains as a Crypto-Asset User
9
Canada Revenue Agency. Line 12700 – Taxable Capital Gains
10
Justice Laws Website. Income Tax Act – Section 54
11
Canada Revenue Agency. T1A Request for Loss Carryback
12
Canada Revenue Agency. Report on Federal Tax Expenditures – Part 6
13
Justice Laws Website. Income Tax Act – Section 110.6
14
Canada Revenue Agency. Keeping Your Income Tax Records
15
Canada Revenue Agency. Where to Keep Your Records and for How Long