Proceeds of disposition refer to the amount you received or will receive for your property when you sell, transfer, or convert it to another use. This concept is crucial for calculating capital gains or losses on your tax return.

What counts as "property":
In this context, "property" includes a wide range of assets, such as:

• Real estate (e.g., houses, land, rental properties)
• Investments (e.g., stocks, bonds, mutual funds)
• Personal-use property (e.g., artwork, jewelry, collectibles)
• Business assets (e.g., equipment, vehicles used for business)
• Intangible property (e.g., patents, trademarks, goodwill)

Key points about proceeds of disposition:

1. Definition: The amount you receive (or will receive) for your property
2. Common scenarios:
   • Sale price of the property
   • Fair market value of property given away
   • Fair market value of property transferred to a trust
   • Fair market value when you change property use (e.g., rental to personal use)
3. Special cases:
   • Deemed proceeds: In some cases, you're considered to have received proceeds even if you didn't actually receive money
   • Gifts: If you give away property, your proceeds are usually considered to be the fair market value of the property
4. Adjustments to proceeds:
   • Outlays and expenses of disposition (e.g., commissions, fees) are deducted from the proceeds
   • Debts assumed by the buyer for the property are added to the proceeds

Important notes:

• Proceeds of disposition are used to calculate your capital gain or loss
• Keep all documents related to the disposition of your property
• The concept applies to various types of property, including real estate, investments, and personal-use property

Remember:

• Accurate reporting of proceeds of disposition is essential for proper tax calculation
• If you're unsure about the proceeds of a specific transaction:
  • For investments: Contact your financial institution or broker
  • For real estate: Consult your sale documents or real estate agent
  • For business assets: Review your sales records or consult your accountant
  • For personal property: Refer to your bill of sale or appraisal documents

If you need assistance entering proceeds of disposition in Wealthsimple Tax, please contact Wealthsimple support. For complex situations or questions about how proceeds of disposition affect your overall tax situation, consider consulting with a tax expert.