What is the capital gains inclusion rate for individuals in Canada?
Correct Answer
A) 50%
In Canada, individuals include 50% of their capital gains as taxable income. This means if you have a $10,000 capital gain, $5,000 would be added to your taxable income and taxed at your marginal tax rate.
Why This Is the Correct Answer
Option A (50%) is correct according to the Income Tax Act of Canada. Under federal tax legislation, individuals must include 50% of their capital gains as taxable income. This means if a property sale results in a $20,000 capital gain, only $10,000 would be added to the individual's taxable income and taxed at their marginal tax rate. This 50% inclusion rate has been the standard for individuals in Canada for many years and applies to all types of capital property, including real estate investments.
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