John owns three properties: his principal residence, a cottage, and a rental property. He sells all three in the same year, realizing gains of $100,000, $80,000, and $60,000 respectively. What is his total taxable capital gain?
Correct Answer
B) $70,000
The principal residence exemption eliminates the $100,000 gain from taxation. The cottage and rental property gains ($80,000 + $60,000 = $140,000) are subject to capital gains tax, with 50% being taxable ($70,000). Only one property per family unit can claim the principal residence exemption per year.
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