As a tradesperson (including an apprentice mechanic), you may decide to sell any or all of the eligible tools for which you claimed a deduction. If so, you must include, in your income in the year you sold the tool(s), the amount by which the proceeds of disposition of each tool is greater than the adjusted cost of the eligible tool sold. The proceeds of disposition of a tool is the amount of money you sold the tool for.

## Note

If you are an employed apprentice mechanic, go to Disposition of tools for an eligible apprentice mechanic to calculate the adjusted cost of the tools you purchased.

Adjust the original cost of each eligible tool you bought by using the following formula :

Adjusted cost of an eligible tool = D − [D x (E/A)]

where

D = the original cost of each eligible tool that you bought in 2023

E = the tradesperson's tools deduction that you claimed in 2023Footnote 1

A = the total cost of all eligible tools that you bought in 2023Footnote 2

Complete a separate calculation for each eligible tool you bought in 2023.

• Example

Bill bought two eligible tools for \$4,500. Tool A and Tool B cost \$2,500 and \$2,000, respectively. Bill must calculate the adjusted cost of these tools. He calculates the adjusted cost of Tool A as follows:

Adjusted cost of Tool A = D − [D x (E/A)]

where

D        = \$2,500

EFootnote 3   = \$1,000 + \$2,132 = \$3,132

A        = \$4,500

By applying this formula, the adjusted cost of Tool A is:

\$2,500 − [\$2,500 x (\$3,132/\$4,500)]

= \$2,500 − \$1,740

= \$760

Similarly, the adjusted cost of Tool B is \$608:

\$2,000 − [\$2,000 x (\$3,213/\$4,500)]

Assume that Bill sells Tool A in 2024 for \$1,500. The proceeds of disposition of Tool A (\$1,500) is greater than its adjusted cost (\$760). As a result, he would have to include the amount of \$740 (\$1,500 – \$760) as income on line 13000 of his 2024 income tax and benefit return. If the proceeds of disposition had been less than the adjusted cost of the tool, Bill would not have been able to deduct the difference.