Linda purchased a cottage in 1984 for $62,000; on February 22, 1994, it was valued at $126,000. On her 1994 tax return, Linda elected to make use of her remaining lifetime capital gains exemption in the amount of $55,000 by recognizing a notional disposition on the cottage. If Linda sells the cottage today for $670,000, how much of a capital gain will Linda realize? O a) $553,000 b) $615,000 c) $526,500 O d) $608,000
Linda purchased a cottage in 1984 for $62,000; on February 22, 1994, it was valued at $126,000. On her 1994 tax return, Linda elected to make use of her remaining lifetime capital gains exemption in the amount of $55,000 by recognizing a notional disposition on the cottage. If Linda sells the cottage today for $670,000, how much of a capital gain will Linda realize? O a) $553,000 b) $615,000 c) $526,500 O d) $608,000
Chapter3: Income Sources
Section: Chapter Questions
Problem 86P
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Transcribed Image Text:Linda purchased a cottage in 1984 for $62,000; on February 22, 1994, it was valued at $126,000.
On her 1994 tax return, Linda elected to make use of her remaining lifetime capital gains exemption
in the amount of $55,000 by recognizing a notional disposition on the cottage. If Linda sells the
cottage today for $670,000, how much of a capital gain will Linda realize?
O a) $553,000
b) $615,000
c) $526,500
d) $608,000
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