In year 1, Laura and her husband purchased a home in Toronto, Ontario for $555,000. In year 8 they also acquired a cottage on Wasaga Beach, Ontario for a cost of $220,000. In year 12 they sold both properties (home and cottage). Proceeds from the sale of the house were $887,000, while proceeds on the sale of the cottage were $345,000.

REQUIRED:

Using the principal residence example, determine the lowest capital gain (for both properties) that Irene and her husband can report in their tax return for Year 12.