Tax Tip: Tax on Personal Use Property

When you sell personal-use property, such as a boat, personal computer or wardrobe, for over $1,000 more than you originally paid, you must report a capital gain on your tax return. The capital gain is calculated as your selling price, known as the proceeds of disposition, less the original cost, known as the adjusted cost base, minus any outlays and expenses if applicable. With the capital gains tax, you must claim 50 percent of your profit and pay tax based on your tax rate. While you are required to claim gains, in most cases, you cannot claim losses when you sell your personal property for less than you originally paid.