General rules
Personal use property (“PUP”) is defined generally as property that you or a non-arm’s length person uses primarily for personal purposes. PUP typically includes property such as your home, cottage, car, furniture, appliances, clothing, art work, bicycles, and so on.
If you sell a PUP at a gain, one-half of it is included in your income as a taxable capital gain. This is the same rule that applies to any capital property.
If you sell a PUP at a loss, the loss is normally denied. However, a loss may be claimed if the property is a “listed personal property”, though only against gains from listed personal property.
Listed personal property is defined to mean the following types of property:
- A work of art;
- A rare book, folio or manuscript;
- Coins;
- Stamps; and
Losses from listed personal property can offset gains from listed personal property, but not other property. If your gains from listed personal property exceed your losses for a taxation year, one-half of the net amount is included in your income. If your losses exceed your gains for a taxation year, your net gain is nil. The excess losses can be carried forward 7 years or back 3 years to offset gains from listed personal property in those years.
