Principal Residence

Read the below situation to answer Questions 13 to 17:

At the end of 2020, Mr. Pippinpaddleopsicopolis sold both his city house and his summer cottage. Every year he has spent at least a portion of the year living in each of the two locations. When he is not residing in these properties they are left vacant. Relevant information on the two properties is as follows:

City House Cottage

Year acquired 2004 2004

Cost $264,000 $ 36,000

Gross proceeds from sale 528,000 330,000

Real estate commissions 32,000 16,000

Mr. Pippinpaddleopsicopolis wishes to minimize any capital gains resulting from the sale of the two properties.

Question 13 (4 points)

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Before applying Principal Residence Exemption, what would the Capital Gain be on the City Home?

Question 13 options:

	528,000
	296,000
	264,000
	232,000
	None of the above

Question 14 (4 points)

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Before applying Principal Residence Exemption, what would the Capital Gain be on the Cottage?

Question 14 options:

	394,000
	330,000
	278,000
	190,000
	None of the above

Question 15 (4 points)

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For the City Home, which years should it be designated as principal residence?

Question 15 options:

	2004 to 2020
	2004 to 2019
	2019 to 2020
	2020 Only
	None of the above

Question 16 (4 points)

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For the Cottage, which years should it be designated as principal residence?

Question 16 options:

	2004 to 2020
	2004 to 2019
	2019 to 2020
	2020 Only
	None of the above

Question 17 (4 points)

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After applying Principal Residence Exemption, what is the least amount of taxable capital gain Mr. Vaughan would report on his tax return from this scenario?

Question 17 options:

	260,000
	232,000
	116,000
	0
	None of the above