Question

Ms. Crumb owns a house in Winnipeg, as well as a cottage at Clear Lake. She purchased the house in 2012 for $130,000. The cottage was gifted to her in 2015 by her parents. At the time of the gift, the fair market value of the cottage was $90,000. She lives in the Winnipeg house during the year and spends her summers at the Clear Lake cottage. Ms. Crumb is contemplating selling both properties in 2017 for the following amounts. Assume selling costs for each property will be 5% of their respective PoD:

PoD

House           $201,500

Cottage          155,000

REQUIRED:

Determine the minimum taxable capital gain that Ms. Crumb can report in 2017 if she sells her house and cottage.

Answer 1

Solution:-

Ms.Crumb's minimum taxable capital gain is calculated as shown in the image below-

Solutions - Boperty year Amounts House 2012 1,30,000 Cottage 2015 90,ooo Calculate- Minimum taxable capital Gaib - (130 000 +LOD Zs) 'g0000 +7150 140075 - 97750 42325 Note :- Given Data & House POD $201500 cottage 155,000 Selling cost for each property is 5% of POD House = 201500 x 5% = 10075 cottage = 155x5%=7750

If Ms.Crumb sells her House and cottage, the minimum taxable capital gain she can report in 2017 is $42325.