Personal use property

The Canada Revenue Agency says...

Capital Gains Guide (T4037)

This refers to items that you own primarily for the personal use or enjoyment of your family and yourself. It includes all personal and household items such as furniture, automobiles, boats, a cottage, and other similar properties.

Report these dispositions on line 158 of Schedule 3.

When you dispose of personal-use property, you may have a capital gain or loss. To calculate this gain or loss, follow these rules:
  • If the adjusted cost base (ACB) of the property is less than $1,000, its ACB is considered to be $1,000.
  • If the proceeds of disposition are less than $1,000, the proceeds of disposition are considered to be $1,000.
  • If both the ACB and the proceeds of disposition are $1,000 or less, you do not have a capital gain or a capital loss. Do not report the sale on Schedule 3 when you file your return.
Note: If you acquire personal-use property for donation to a qualified donee in circumstances where it is reasonable to conclude that the acquisition of the property relates to an arrangement, plan, or scheme promoted by another person or partnership, the above rules do not apply.

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 (see the next section); or
  • 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.
Related information
Schedule 3 - Capital gains (or losses)
Capital gains