Personal-use property losses
When you dispose of personal-use property that has an ACB or proceeds of disposition of more than $1,000, you may have a capital gain or loss. You have to report any capital gain from disposing of personal-use property.
However, if you have a capital loss, you usually cannot deduct that loss when you calculate your income for the year. In addition, you cannot use the loss to decrease capital gains on other personal-use property. This is because if a property depreciates through personal use, the resulting loss on its disposition is a personal expense.
These loss restrictions do not apply:
- if you disposed of personal-use property that is listed personal property
- to a bad debt owed to you from the sale of a personal-use property to a person with whom you deal at arm's length
For information on gains and losses from listed personal property such as paintings, rare books, coins and stamps, see Listed personal property (LPP).
Example
Jane sold the following personal-use properties in 2023:
| Property sold | Proceeds of disposition | Adjusted cost base | Outlays and expenses |
|---|---|---|---|
| China cabinet | $900 | $500 | $0 |
| Boat | $1,200 | $850 | $50 |
| Personal computer | $1,500 | $3,200 | $30 |
Jane calculates the capital gain or loss for each transaction as follows:
Proceeds of disposition (greater of selling price and $1,000, see Personal-use property) minus ACB [(greater of cost and $1,000) plus outlays and expenses, see Personal-use property] = Capital gain or loss.
China cabinet: $1,000 - $1,000 $ = $0.
For the proceeds of disposition and the ACB, Jane uses $1,000, as both were less than that amount. As a result, there is no capital gain or loss for this transaction and Jane does not have to report it on Schedule 3.
Boat: $1,200 - ($1,000 + $50) = $150.
Because the cost of the boat is less than $1,000, the ACB is considered to be $1,000. Jane reports $150 as a capital gain.
Personal computer: $1,500 - ($3,200 + $30) = ($1,730).
Jane's capital loss is not deductible. She also cannot use the loss to decrease any other capital gains realized in the year.
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