Mohammed purchased 1,000 units of Fund X at $15.00/unit. Three months later, he purchased another 500 units at $16.00/unit. Six months after that, he sold 700 units at $17.00/unit. Assuming no distributions occurred, how much capital gain or loss did Mohammed realize on this sale?

Question: Mohammed purchased 1,000 units of Fund X at $15.00/unit. Three months later, he purchased another 500 units at $16.00/unit. Six months after that, he sold 700 units at $17.00/unit. Assuming no distributions occurred, how much capital gain or loss did Mohammed realize on this sale?

Answer options:

• Capital gain of $1,400 ✅ Capital gain of $1,166.67
• Capital loss of $166.67
• Capital gain of $1,500

Correct answer: Capital gain of $1,166.67

Explanation: First, calculate the total ACB: (1,000 * $15.00) + (500 * $16.00) = $15,000 + $8,000 = $23,000. Total units = 1,000 + 500 = 1,500. ACB per unit = $23,000 / 1,500 = $15.3333. Proceeds from sale = 700 units * $17.00 = $11,900. Cost of units sold = 700 units * $15.3333 = $10,733.33. Capital gain = $11,900 - $10,733.33 = $1,166.67. (IFIC Chapter 6: ACB Tracking)