If a taxpayer sells shares of a publicly traded company at a gain and also disposes of a personal-use property (e.g., a painting) at a loss, how are these treated for tax purposes?

Question: If a taxpayer sells shares of a publicly traded company at a gain and also disposes of a personal-use property (e.g., a painting) at a loss, how are these treated for tax purposes?

Answer options:

• The capital gain from shares is fully offset by the capital loss from the painting. ✅ The capital gain from shares is taxable, and the loss from the painting is non-deductible.
• Both the capital gain and capital loss are fully deductible, offsetting each other.
• The capital loss from the painting can only be carried forward to offset future capital gains from personal-use property.

Correct answer: The capital gain from shares is taxable, and the loss from the painting is non-deductible.

Explanation: Under Canadian tax law, capital losses from the disposition of personal-use property are generally not deductible, nor can they be used to offset capital gains from other types of property. The capital gain from the publicly traded shares remains taxable.