How residences should be designated in order to accomplish

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Mr. Stewart Simms has lived most of his life in Vancouver. In 1996, he purchased a three bedroom home near English Bay for $125,000. In 2001, he acquired a cottage in the Whistler ski area at a cost of $40,000. In all subsequent years, he has spent at least a portion of the year living in each of the two locations. When he is not residing in these properties, they are left vacant.

On October 1, 2020, Mr. Simms sells the English Bay property for $515,000 and the cottage at Whistler for $320,000.

Mr. Simms wishes to minimize any capital gains resulting from the sale of the two properties.

Required:

Problem 1: Describe how the residences should be designated in order to accomplish Mr. Simms' goal. In addition, calculate the amount of the taxable capital gain that would arise under the designation that you have recommended.

Reference no: EM132952549

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