Your client and their spouse are retiring in 2020. They are selling the family home and cottage
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Question:
Your client and their spouse are retiring in 2020. They are selling the family home and cottage and are moving into a new home. Details of the home and cottage sales are as follows:
Year Purchased | Proceeds of Sale | ACB | |
Family home | 2005 | $800,000 | $380,000 |
Cottage | 1994 | $550,000 | $50,000 |
Real estate and legal fees on the sales amounted to $42,000 on the family home and $25,000 on the cottage, respectively
Required:
- Discuss how we would evaluate whether the gain on sale should be considered on account of income or as a capital gain. i.e. what are the key factors
- If the gain is considered a capital gain, what is needed for the properties to qualify for the principal residence exemption.
Related Book For
Operations Management Creating Value Along the Supply Chain
ISBN: 978-0470525906
7th Edition
Authors: Roberta S. Russell, Bernard W. Taylor
Posted Date: