Emma has provided to you a listing of the transactions she hasundertaken throughout the financial year to assist you incompleting her 2015 income tax return.
Sale of a block of land for $1,000,000: Emma purchased the land asan investment in 1991. The purchase price was $250,000, plus $5,000in stamp duty, $10,000 in legal fees. To fund the purchase, shetook out a loan on which she paid interest totalling $32,000.During the period of ownership her council rates, water rates andinsurance totalled $22,000. In January 2005 a dispute occurred witha neighbour over the use of the land and legal fees incurredamounted to $5,000 in resolving this dispute. Before putting theproperty on the market $27,500 was spent to remove a number oflarge dangerous pine trees that were on the land. Advertising,legal fees and agent’s fees on the sale of the land were$25,000.
Sale of Emma’s 1000 shares in Rio Tinto for $50.85 per share: Emmapaid brokerage fee of 2% on the sale. Emma initially purchased theshares for $3.5 per share in 1982.
Sale of a stamp collection Emma had purchased, from a privatecollector, in January 2015 for $60,000: Emma sold the collection atauction for $50,000. Auction fees totalled $5,000 for thesale.
Sale of a grand piano for $30,000: It was initially bought for$80,000 in 2000.
HI6028 Taxation Theory, Practice and Law Individual AssignmentT2.2019 4
Advise Emma of the capital gain tax (CGT) consequences of hertransitions. Ignore indexation. Your answer must include referencesto relevant tax law and or cases.
IMPORTANT
Hello, To support our answer we need to refer to the correctkey section of the law. Support your answer by referring torelevant statutory & case law.
