Quote:
Originally Posted by Mathgod
Hmm.. looks like you misunderstood what was being said. Either that or you were so busy trying to push your ideology that you didn't pay attention to what was said.
Let's try again. Jack buys a house that costs $500,000, and the next year sells it for $520,000. The capital gain is $20,000, not $520,000.
Now Jack sells a property he bought 50 years ago, paying $40,000 for it at the time, and sells it today for $500,000. You're not suggesting the capital gain is $500k, are you? It would be $460k would it not?
But adjusted for inflation and converted into today's dollars, the initial buying price is actually something like $240k. So the question was, is the capital gain $460k or $260k? Judging by the answers so far, looks like it's $460k. Just wanted to confirm.
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Somewhat related...For very old property, there are basically no capital gains up to 1972. If the property was owned prior to Jan 1, 1972, the ACB when you sell it is the value of the property on Jan 1, 1972. It's known as V-day valuation.
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