The “2026 Crypto Tax Cheat Sheet”
As we approach the end of 2025, investors should be acutely aware of the impending “Tax Cliff” set to take effect on January 1, 2026. This significant change will see the capital gains inclusion rate rise from 50% to 66.7% for individuals with annual gains exceeding $250,000. This shift could have substantial implications for your investment strategy and tax liabilities.
Tax-Loss Harvesting Deadline
To mitigate the impact of this increase, it is crucial to engage in tax-loss harvesting before the year ends. Investors must realize any losses by December 31, 2025, to offset gains realized during the year. However, be cautious of the “Superficial Loss Rule.” If you repurchase the same asset within 30 days of selling it at a loss, the Canada Revenue Agency (CRA) will deny the tax credit for that loss. Therefore, strategic planning is essential to ensure that you maximize your tax benefits while adhering to CRA regulations.
New Global Transparency: The Crypto-Asset Reporting Framework (CARF)
Starting January 1, 2026, Canada will implement the Crypto-Asset Reporting Framework (CARF). This new “tax cliff” regulation mandates that cryptocurrency exchanges automatically report detailed transaction data and wallet flows directly to the CRA. This increased transparency means that investors must be diligent in their record-keeping and reporting to avoid potential compliance issues.
2026 TFSA Strategy
As we navigate these changes, it is vital to consider how they will affect your Tax-Free Savings Account (TFSA) strategy. With the capital gains inclusion rate set to rise, optimizing your TFSA contributions and withdrawals will be more important than ever.
First & Fifteenth Financial
At First & Fifteenth Financial, we are committed to guiding you through these complex changes. Our team of experts is ready to help you develop a tailored strategy that aligns with your financial goals while minimizing your tax liabilities heading into this tax cliff and beyond that.
The 50% Inclusion Rate Window Closes December 31st
Don’t wait until it’s too late. Take action now to capitalize on the current 50% capital gains inclusion rate before it closes on December 31st. Contact us today to discuss your investment strategy and ensure you are well-prepared for the upcoming changes.
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- Accountex 2025: Toronto & 1st15th
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