Acct461NotesCh7

Acct461NotesCh7 - Capital Gains - defined as gains on...

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Capital Gains - defined as gains on disposal of capital property (assets) - capital assets are assets which are capable of earning income in the form of business profits, interest, dividends, rents or royalties Special Rules - Assets purchased before 1972 - Assets purchases after 1971 - Principal Residence - Personal Use Property - Listed Personal Property - Capital Gain Reserves
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Taxable Capital Gains - calculated as: Proceeds of Sale - Cost of asset sold = Capital Gain Taxable Capital Gain = 50% of Capital Gain Allowable Capital Losses = 50% of Capital Loss - these can be applied against taxable capital gains
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Asset purchased before 1972 - there was no capital gains tax before 1972 - all assets owned at December 31, 1971 are valued at that date. This is called their V-day value. - for the sale of assets owned at December 31, 1971, there are two methods to calculate the capital gain. These are the median rule and the V-day valuation method. Median Rule
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Acct461NotesCh7 - Capital Gains - defined as gains on...

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