Quote:
Originally Posted by Mathgod
My apologies if this has already been answered.
Jack is selling a property that he bought a very long time ago (say 50 years). The capital gains on it is the price it sold for (PoD) minus the cost to acquire it back then (ACB). But is Jack allowed to convert the ACB into today's dollars? It would seem rather silly to calculate tax owed based on the number of dollars paid in 1975 as if they were 2025 dollars, after all, they weren't 2025 dollars...
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Um...no? That's not in any way how it works. Jack pays tax on the whole gain, and if its ~100% of the proceeds that are taxable then maybe Jack's descendants will start to vote for politicians with less inflationary policies.