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Ezzah Ali has owned a large country home near Toronto since 2008. It was purchased at a cost of $850,000. Because of her growing need
Ezzah Ali has owned a large country home near Toronto since 2008. It was purchased at a cost of $850,000. Because of her growing need to spend time in the city, in 2016 she purchased a Toronto condominium at a cost of $625,000. At the beginning of 2023, she concludes that she would like to move to the west coast, and she sells both Ontario properties. The country home is sold for $1,200,000 in June of 2023. The Toronto condominium is sold in July 2023 for $900,000. Real estate commissions of 5% of the sales price were charged on both transactions. Ezzah purchases a home in Vancouver for $1,500,000 in November 2023. She anticipates that she will be in Vancouver for approximately five years before selling the Vancouver home and returning to Ontario. She plans to purchase another home in Ontario at that time. As Ezzah has been the only individual to use both properties, either one could be designated as her principal residence for the relevant years. She wishes to minimize any capital gains resulting from the sale of the two properties using the principal residence exemption, however since she expects the Vancouver home to increase in value at a much quicker pace compared to the Ontario properties, she plans to keep the 2023 year as a year to eventually designate toward the Vancouver home. Required: Describe how the residences should be designated in order to accomplish Ezzahs goal. In addition, calculate the total capital gain that would arise under the designation that you have recommended
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