IFIC Mutual Funds Licensing Practice Exam · Question
When an investor sells units of a non-registered mutual fund for a profit, how is this profit generally taxed in Canada?
Profits from the sale of non-registered mutual fund units are generally treated as capital gains. In Canada, only 50% of a capital gain is taxable (the 'taxable
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Question: When an investor sells units of a non-registered mutual fund for a profit, how is this profit generally taxed in Canada?
Answer options: ✅ As a capital gain, with 50% of the gain being taxable.
- As regular income, 100% taxable.
- As a dividend, eligible for the dividend tax credit.
- It is tax-exempt if held for more than one year.
Correct answer: As a capital gain, with 50% of the gain being taxable.
Explanation: Profits from the sale of non-registered mutual fund units are generally treated as capital gains. In Canada, only 50% of a capital gain is taxable (the 'taxable capital gain').
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