John sold his primary residence, which he purchased for $300,000, for $700,000. He also sold a cottage for $250,000, which he purchased for $150,000. How much is his taxable capital gain in the current year?

Question: John sold his primary residence, which he purchased for $300,000, for $700,000. He also sold a cottage for $250,000, which he purchased for $150,000. How much is his taxable capital gain in the current year?

Answer options:

• $0 ✅ $50,000
• $100,000
• $200,000

Correct answer: $50,000

Explanation: The sale of a primary residence is exempt from capital gains tax. For the cottage, the capital gain is $250,000 - $150,000 = $100,000. The taxable capital gain is 50% of this, resulting in $100,000 * 0.50 = $50,000.