Robert sold a rental property (ACB $225,000) to his wife, Sally, for $500,000 on January 5, 2018. At the time of this sale, the fair market value was $750,000. Robert and his wife elected under subsection 73(1) of the Income Tax Act for that subsection not to apply to the sale. Sally held onto the rental property until December 27, 2020, when she sold it for $950,000. What are the taxable capital gains that Robert and Sally must report on their 2020 tax returns with respect to the sale of the rental property? Assume that neither individual has any principal residence claims on the rental property. Group of answer choices

The taxable capital gains are $262,500 for Robert and $225,000 for Sally.

The taxable capital gains are $137,500 for Robert and $125,000 for Sally.

The taxable capital gains are $137,500 for Robert and $225,000 for Sally.

The taxable capital gains are $175,000 for Robert and $225,000 for Sally.