Chi has the following transactions in Smoke Corp. and Mirrors Corp. shares: Chi's taxable capital gains for 2019 and 2020 are:

Question

Chi has the following transactions in Smoke Corp. and Mirrors Corp. shares:  Chi's taxable capital gains for 2019 and 2020 are:

Quizplus · Accepted Answer

To calculate the taxable capital gains for each year, we need to calculate the adjusted cost base (ACB) of shares sold and subtract it from the proceeds of the sale.

For the Smoke Corp. shares: 
- ACB = $4,000 + $1,000 = $5,000 
- Proceeds of sale = $8,000 
- Capital gain = $8,000 - $5,000 = $3,000

For the Mirrors Corp. shares: 
- ACB = $3,000 + $500 = $3,500 
- Proceeds of sale = $4,500 
- Capital gain = $4,500 - $3,500 = $1,000

So, the total capital gains for 2019 are: 
- Smoke Corp. = $3,000 
- Mirrors Corp. = $1,000 
- Total = $4,000

The total capital gains for 2020 are: 
- Smoke Corp. = $0 (No further sales) 
- Mirrors Corp. = $500 ($4,000 - $3,500)

Therefore, Chi's taxable capital gains for 2019 and 2020 are $275 for 2019 and $90 for 2020.

Chi Has the Following Transactions in Smoke Corp