![]() However, to prevent you from claiming a loss that you haven’t really endured, the CRA requires you to use the fair market value of the asset as the proceeds of disposition. In these cases, the proceeds of disposition would be zero, and you would have a loss. If you give capital property to a friend, a relative or anyone else, you do not calculate your capital gains or losses using the proceeds of disposition. ![]() Instead, use the exchange rate on the day when you sold the capital property. Do not use the exchange rate on the day you are completing your income tax return. If you have sold a capital asset for foreign currency, you must convert the proceeds of disposition from the foreign currency to Canadian dollars. This form has eight different sections devoted to different types of capital property, which will then calculate your capital gains to be reported on line 12700 of your income tax return. Complete Schedule 3 to determine what you need to report. Reporting the Disposition of Capital PropertyĮven if you don’t have a capital gain or loss, you still have to report the proceeds of disposition every time you sell capital property. Click here to learn more on claiming capital gains and losses. A positive number indicates a gain, while a negative number indicates a loss. Subtract the adjusted cost base and the selling expenses from the proceeds of disposition. the expenses you spent to sell the property.Calculating Capital Gains or Losses To calculate your capital gains or losses, you must know: For example, if you trade in your old car and receive a $4,000 credit toward the new one, the proceeds of disposition is $4,000. However, if you traded in the property to buy a new one, the proceeds of disposition is the amount you received for the trade-in. In most cases, the proceeds of disposition is the amount you received for the property. “ Disposition” refers to when you dispose of or get rid of a property. To calculate your gains or losses, you need to understand the definition of the phrase “proceeds of disposition.” You also need to know when the CRA requires you to report your proceeds of disposition and when it prefers an alternative figure. ![]() If you sell or give away capital property, you have to report the transaction to the Canada Revenue Agency.
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