A client holds $20,000 worth of Bitcoin purchased for $5,000. They sell it in the current tax year. The client's total income for the year, excluding this transaction, puts them in a federal tax bracket of 26% and a provincial bracket of 11.5%. What is the federal tax payable on the capital gain from the Bitcoin sale?

Question: A client holds $20,000 worth of Bitcoin purchased for $5,000. They sell it in the current tax year. The client's total income for the year, excluding this transaction, puts them in a federal tax bracket of 26% and a provincial bracket of 11.5%. What is the federal tax payable on the capital gain from the Bitcoin sale?

Answer options: ✅ $1,950

• $3,900
• $2,500
• $6,500

Correct answer: $1,950

Explanation: The capital gain is $20,000 (proceeds) - $5,000 (cost) = $15,000. The taxable capital gain is 50% of the capital gain, which is $7,500. The federal tax payable on this taxable capital gain is $7,500 * 26% = $1,950.