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Buy a painting for $2,000, sell it for $11,000, and the $9,000 gain goes on your return, with half of it, $4,500, taxable. For an Ontario employee earning $60,000, that’s about $1,334 of extra tax in 2026 (an estimate). Smaller sales often cost nothing, because the first $1,000 of your cost and the first $1,000 of your proceeds are ignored.
How does the $1,000 rule work?
If you paid less than $1,000, the rules treat your cost as $1,000. If you sold for less than $1,000, they treat your proceeds as $1,000. That comes from subsection 46(1) of the Income Tax Act, in the Justice Laws Website: Income Tax Act, section 46. When both figures are $1,000 or less there’s no gain or loss, and the Canada Revenue Agency: Completing Schedule 3 page tells you to leave the sale off your return entirely.
| You paid | You sold for | Used for the math | Result |
|---|---|---|---|
| $400 | $3,000 | $1,000 cost, $3,000 proceeds | $2,000 gain |
| $700 | $900 | $1,000 cost, $1,000 proceeds | Nothing to report |
| $5,000 | $600 | $5,000 cost, $1,000 proceeds | $4,000 loss |
Sets are the catch. A matched pair of vases or a stamp collection counts as one property under subsection 46(3) if you split it up and sell the pieces to the same buyer, so you don’t get a fresh $1,000 floor for each piece.
What counts as personal-use property, and what is listed personal property?
Personal-use property is whatever you own mostly for your family’s enjoyment: furniture, a car, a boat, a cottage. The Canada Revenue Agency: Capital gains guide says you generally can’t claim a loss when you sell it. Listed personal property (LPP) is a short list of things that tend to climb in value: prints, etchings, drawings, paintings, sculptures and similar works of art, jewellery, rare folios, rare manuscripts, rare books, stamps and coins. Gains work the same way for both groups. Losses don’t.
Can I deduct a loss on a car, a boat or a painting?
Not on a car, a boat, a sofa or a canoe. A loss on ordinary personal-use property is gone, and it can’t reduce gains on anything else. LPP is the narrow exception: an LPP loss can only cancel LPP gains, so a loss on coins can offset a gain on a painting. Whatever you can’t use gets carried back 3 years or forward 7, still only against LPP gains. For a carry back you file Form T1A with your return, with no amended return for the earlier year. The $4,000 loss in the third row of the table is real, but it’s locked to LPP. Had that item been a sofa, it would simply be lost.
What does a $9,000 art gain cost in tax?
About $1,334 on 2026 numbers. You paid $2,000 for the painting and sold it for $11,000, so the capital gain is $9,000. The inclusion rate stays at 50% for 2026, according to the Canada Revenue Agency: Capital gains inclusion rates, so $4,500 is added to your income. For an Ontario employee earning $60,000, the engine taxes that $4,500 at 29.65%, which is $1,334 and leaves you about $7,666 ahead on the deal. The estimate uses basic credits only. A dealer’s or auction house’s commission would shrink the gain, and the estimate leaves it out. Try your own figures in the capital gains tax calculator.
What about selling my car?
A personal car sold for less than you paid gives you no loss to claim. Say you bought one for $30,000 and sell it for $18,000. The $12,000 drop isn’t deductible, because the CRA’s guide treats a car as personal-use property with no loss allowed. A gain is rare, but a classic can do it. Pay $12,000, sell for $20,000, and the $8,000 gain is reportable, with $4,000 of it taxable. If you claimed capital cost allowance because the car earned business income, recapture can apply, and the business car write-off page explains how.
How do I report the sale on Schedule 3?
Personal-use property goes in Part 3, line 9, with the total gain on line 15800. LPP goes on line 10, with the net gain on line 15900. Schedule 3 also has a line for LPP losses from other years. Those line numbers come from the CRA’s 2025 guidance, so check them against the form for the 2026 tax year when you file in spring 2027. A gift or an inheritance changes your cost, and our page on capital gains on inherited property shows how.
When does selling things become a business?
Buy things to resell at a profit, or sell often enough that it looks like trade, and the CRA can treat the whole profit as business income instead of a capital gain. Business income is taxed at 100% rather than 50%, goes on Form T2125, and may need GST/HST registration once revenue passes $30,000. The CRA asks the same business-or-capital question about other assets such as crypto, and says even a single purchase and resale can be business income when the intent was to trade, as its Canada Revenue Agency: Reporting income from crypto-asset transactions page shows. Clearing out your garage doesn’t qualify. Buying estate-sale paintings to flip every month does. Our guide to capital gains tax in Canada compares the two treatments.
Where does this information come from?
The personal-use and listed personal property rules come from the CRA capital gains guide, the Schedule 3 instructions and section 46 of the Income Tax Act, and the dollar example from our own engine, an estimate for an Ontario employee earning $60,000. Checked in October 2026. This is an independent information site: we provide no services, we do not represent the CRA or any organization, and we do not guarantee that anything here is accurate or current. We accept no liability for decisions based on it. Check the official source before you rely on it. See the full disclaimer.
Frequently asked questions
Do I have to report a sale for less than $1,000?
No, as long as both your cost and your proceeds were $1,000 or less. The $1,000 floor on each figure leaves no gain or loss, and the CRA says to keep that sale off Schedule 3.
Is there tax when I sell a used car privately?
Rarely. Most used cars sell for less than they cost, which creates no deductible loss. A car that sells for more than you paid is a capital gain on personal-use property, and half of that gain is taxable.
How long can I use a loss on a coin or art sale?
A listed personal property loss can go back 3 years or forward 7, but only against gains on other listed personal property. To claim a carry back against an earlier year, file Form T1A.
Does the capital gains exemption on a home apply to art or a car?
No. The principal residence exemption covers a home, not collectibles or vehicles. The lifetime capital gains exemption, $1,275,000 for 2026, is for qualifying small business shares and farm or fishing property, so a painting doesn't qualify.