Ms. Chen sold her principal residence in Toronto for $950,000, incurring selling costs of $30,000. She originally purchased the home for $400,000. She also sold a Canadian vacation property for $300,000 (original cost $200,000) and Canadian equity mutual funds for $70,000 (original cost $50,000). Assuming both non-principal residence sales occurred in the same tax year, what is her total capital gain to be included in her taxable income for the year?

Question: Ms. Chen sold her principal residence in Toronto for $950,000, incurring selling costs of $30,000. She originally purchased the home for $400,000. She also sold a Canadian vacation property for $300,000 (original cost $200,000) and Canadian equity mutual funds for $70,000 (original cost $50,000). Assuming both non-principal residence sales occurred in the same tax year, what is her total capital gain to be included in her taxable income for the year?

Answer options:

• $120,000
• $60,000
• $70,000 ✅ $50,000

Correct answer: $50,000

Explanation: The principal residence gain is exempt. The capital gain on the vacation property is $300,000 - $200,000 = $100,000. The capital gain on the mutual funds is $70,000 - $50,000 = $20,000. Total capital gains are $100,000 + $20,000 = $120,000. The inclusion rate for capital gains is 50%, so $120,000 * 0.50 = $60,000.