Every year, as temperatures drop and snow blankets Canada, investors gear up for more than ski season. It’s also a time to take a closer look at how portfolios performed. The fourth quarter is when many crypto holders review results and get their records ready for year-end.
Some investors choose to sell assets that have declined in value before the end of the year to trigger tax losses in the year that can be used to offset any realized gains they may have. This tax strategy, called tax-loss selling, is not unique to crypto and is also applied to traditional investments held in non-registered accounts.
Generally, sales or swaps of digital assets are considered dispositions for Canadian tax purposes. Recording trade dates and amounts along the way helps keep your information organized for reporting and tax filings later.
Many investors review and adjust their asset positions so that any outstanding trades are settled before their tax year ends. Crypto transactions are often recognized for settling faster than traditional assets, but exchange processing times can still vary, especially during high-volume periods. That’s why activity often picks up in December as people adjust their portfolios to deploy this tax strategy.
When you trade across several wallets or platforms, it can be tricky to keep everything organized. To help with this, Newton includes an integration with Koinly, a crypto tax software tool that helps you organize transactions and prepare reports in a CRA-aligned format.
You can find this feature in your Newton app under Settings → Statements & Reports → Tax Reports. From there, you can export your trading data directly in a Koinly-formatted file or connect your account to Koinly with one tap. It’s an easy way to avoid extra work at year-end.
Rules and classifications for digital assets depend on how the activity is viewed under Canada Revenue Agency guidelines. Every individual’s situation is unique, refer to the Canada Revenue Agency’s website or speak with a qualified accountant for guidance that fits you.
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