To simplify the system and avoid onerous record-keeping, the Income Tax Act deems that both proceeds of disposition and ACB are a minimum of $1,000. This is known as the de minimums rule and it applies only to personal-use property, including listed personal property. Under this rule:

• Proceeds of disposition are the greater of actual proceeds and $1,000; and

• ACB is the greater of actual cost and $1,000.

Therefore, if a personal-use property is disposed of and the actual POD and ACB are both less than (or equal to) $1,000, no gain or loss exists for federal tax purposes. This allows taxpayers to avoid having to keep records for small personal items.