Many years ago, Guylaine invested in an apartment building that she wants to

bequeath to her daughters Lucie and L$$a when she dies. She has just found

out that there will then be a large tax liability on the capital gain, which could

force her daughters to sell the building. The fair market value $($FMV$)$ of the

building is $$800,000$ and its adjusted cost base $($ACB$)$ is $$225,000.$ Guylaine's

marginal tax rate is $50\%.$ She is thinking of buying life insurance for her

daughters to cover the capital gains tax.

How much would the tax liability be if Guylaine were to die in the near future?

$$400,000.$

$$287,500$

$$200,000$

$$143,750.$