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Dylan inherited his uncle's vacant furnished rental Property in Sydney when his uncle died on 1 April 2020. His uncle had acquired the rental property on 1 July 2000 for $450,000. The market value of the property on the day his uncle died is $800,000. On 30 May 2020 Dylan paid a property developer $10,000 for an option to sell the property for $950,000. The option is exercised in July 2020 and legal title to the property is transferred to the new owner on 15 July 2020. As part of the sale contract the property developer agreed to pay Dylan the purchase price in equal installments over the next 5 years. To increase the sale price Dylan gave the furniture to a charity and hired new furniture to decorate the house while it was on display. The furniture hire cost $2,000 and the charity estimated the market value of the donated furniture at $5,000 (it had cost Dylan's uncle $10,000 to purchase). Explain the income tax implications of the above transactions for Dylan. Refer to relevant sections of the tax law, cases and ATO rulings to support your answers. Dylan inherited his uncle's vacant furnished rental Property in Sydney when his uncle died on 1 April 2020. His uncle had acquired the rental property on 1 July 2000 for $450,000. The market value of the property on the day his uncle died is $800,000. On 30 May 2020 Dylan paid a property developer $10,000 for an option to sell the property for $950,000. The option is exercised in July 2020 and legal title to the property is transferred to the new owner on 15 July 2020. As part of the sale contract the property developer agreed to pay Dylan the purchase price in equal installments over the next 5 years. To increase the sale price Dylan gave the furniture to a charity and hired new furniture to decorate the house while it was on display. The furniture hire cost $2,000 and the charity estimated the market value of the donated furniture at $5,000 (it had cost Dylan's uncle $10,000 to purchase). Explain the income tax implications of the above transactions for Dylan. Refer to relevant sections of the tax law, cases and ATO rulings to support your answers

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