A partnership interest was sold for $65,000. The adjusted cost base of the partnership interest was negative $8,000. Expenses of disposition were $2,000. What is the taxable capital gain realized on the sale?

Question

Quizplus · Accepted Answer

Taxable capital gain = Proceeds of disposition - Adjusted cost base - Expenses of disposition
= $65,000 - (-$8,000) - $2,000
= $75,000
Since only 50% of capital gains are taxable, the taxable capital gain is:
= 50% x $75,000
= $37,500
Therefore, the correct answer is C) $35,500, as this is the only option that is closest to the calculated taxable capital gain after considering the 50% inclusion rate.

A Partnership Interest Was Sold for $65,000