A client owns a rental property in Calgary that they purchased for $400,000 and sold for $550,000. They claimed $50,000 in depreciation over the years. What is their taxable capital gain?
Correct Answer
A) $75,000
The capital gain is $150,000 ($550,000 - $400,000), but only 50% is taxable, making the taxable capital gain $75,000. The depreciation claimed will be recaptured as income, but this is separate from the capital gains calculation.
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