Certified Financial Planner (CFP) Practice Exam · Question
Which of the following assets, if sold for a gain, would typically result in a 0% inclusion rate for capital gains?
The capital gain on the sale of a principal residence is generally fully exempt from tax if it was designated as the principal residence for every year it was o
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Question: Which of the following assets, if sold for a gain, would typically result in a 0% inclusion rate for capital gains?
Answer options:
- Shares of a publicly traded company held in a non-registered account.
- A vintage car collected as a hobby, sold for profit. ✅ A principal residence designated for all years of ownership.
- Land held for investment purposes.
Correct answer: A principal residence designated for all years of ownership.
Explanation: The capital gain on the sale of a principal residence is generally fully exempt from tax if it was designated as the principal residence for every year it was owned, resulting in a 0% inclusion rate.
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