The investor’s capital gain is calculated by subtracting the adjusted cost base and selling expenses from the disposition proceeds.

Original purchase price:

800 × $15 = $12,000

Purchase commission:

$12,000 × 2% = $240

Adjusted cost base:

$12,000 + $240 = $12,240

Gross sale proceeds:

800 × $17 = $13,600

Net disposition proceeds after the $40 selling commission:

$13,600 − $40 = $13,560

Capital gain:

$13,560 − $12,240 = $1,320

Applying the question’s specified 50% inclusion rate:

$1,320 × 50% = $660

The taxable capital gain is therefore $660, making option D correct. Both acquisition and disposition expenses must be included appropriately. The purchase commission increases the adjusted cost base, while the selling commission reduces the proceeds of disposition. Ignoring either commission would overstate the gain. Applying the inclusion rate to gross sale proceeds or to the price increase before transaction costs would also produce an incorrect result.

The Retail Securities syllabus expressly requires candidates to calculate capital gains and losses, apply the tax treatment of gains and losses, and assess tax consequences when making investment recommendations.

===============