Mr. Bob McPipe owns a home in Edmonton as well as a cottage at Pigeon Lake. He purchased the
house originally for $250,000, and the cottage was purchased for $120,000. Bob lived in the Edmonton
house during the year, but spent six weeks each summer at the cottage.
During the current year, both properties sold: the house for $400,000 and the cottage for $250,000.
Bob informs you that he owned the house for 16 years and the cottage for 13 years.
Required: What is the minimum capital gain Bob must report on the sale of the two properties
in the current year?

Exempt Gain =

(1+4) / 16 x $150,000 =

Exempt Gain =	(1+12) / 13 x $130,000 =
The full amount of the gain is exempt from tax.

Calculation of Capital Gain:		House
Proceeds of disposition
Adjusted cost base
Capital Gain (loss)
Principal Residence Exempt.
Capital Gain
Inclusion rate
Taxable capital gain