A property owner in Toronto sells their principal residence for $800,000 after purchasing it 5 years ago for $600,000. How much capital gains tax will they owe?
Correct Answer
A) $0 due to the principal residence exemption
The principal residence exemption eliminates capital gains tax on the sale of a taxpayer's principal residence. Since this was their principal residence for the entire ownership period, no capital gains tax is owed.
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