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:

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 2019:

Information required to calculate Jane's capital gains or losses
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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