Richard is employed by a Canadian oil company. In Year 3, he was transferred from Toronto to Calgary. He rented his home to a tenant while he was in Calgary (Year 3 to Year 9). In the middle of Year 9 he moved back into his home in Toronto. In Year 12 he sold his Toronto home. The value of the home at relevant dates was as follows:

Determine the minimum taxable capital gain(s) to be recognized by Richard €” (a) without a subsection 45(2) election, and (b) with a subsection 45(2) election. Income tax reference: ITA 40(2)(b), 41(1), 45(2), 54, 54.1.

Transcribed Image Text:

Year (purchase price) Year 3 commenced renting the home Year 9 moved back into the home Year 12 sold the home $250,000 S320,000 S450,000 S490,000