An investor held 1,000 units of a mutual fund at an ACB of $15.00 per unit. The fund distributed $0.50 per unit as a Return of Capital (ROC). After the distribution, the investor sold 300 units for $16.00 per unit. What is the capital gain or loss on the sale of these 300 units?

Question: An investor held 1,000 units of a mutual fund at an ACB of $15.00 per unit. The fund distributed $0.50 per unit as a Return of Capital (ROC). After the distribution, the investor sold 300 units for $16.00 per unit. What is the capital gain or loss on the sale of these 300 units?

Answer options: ✅ Capital Gain of $450

• Capital Gain of $300
• Capital Loss of $150
• Capital Gain of $600

Correct answer: Capital Gain of $450

Explanation: The initial ACB was $15.00 per unit. The ROC of $0.50 per unit reduces the ACB to $14.50 per unit ($15.00 - $0.50). The sales price was $16.00 per unit. The capital gain per unit is $16.00 - $14.50 = $1.50. For 300 units, the total capital gain is $1.50 * 300 = $450.