A dining room suite that had been purchased for $700 was sold during the year. The proceeds of disposition totalled $1,500. The taxable capital gain on the transaction is $250.

Question

Quizplus · Accepted Answer

To calculate the taxable capital gain, we subtract the adjusted cost base ($700) from the proceeds of disposition ($1,500) to get a capital gain of $800. We then multiply this by the inclusion rate of 50% to get a taxable capital gain of $400. Therefore, the statement in the question is false and the correct answer is B.

A Dining Room Suite That Had Been Purchased for $700