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Question 4 On 10 August 1990 John bought a holiday home which he used every weekend. The property was never leased out. The property cost $150,000. He consulted with his accountant regarding the purchase and this advice cost him $500 in August 1990. In addition he paid stamp duty of $3,150 in August 1990. John used a loan to acquire the property and paid $250 stamp duty on the loan in October 1990. The property was sold in September 2013 for $280,000. Costs associated with the sale include commission of $6,750 paid to the real estate agent who sold the property and advertising of $600. Both of these expenses were paid in September 2013. In December 1994 Johns next door neighbour, Shane Sutcliffe, disputed the placement of the fence and considered that some of the land on Johns side of the fence was in fact his land. It cost John $2,000 in various fees and costs to prove that the fence was correctly placed. Shane did not pay any of Johns costs. The Australian College for Microcomputers Pty Ltd Sydney 2019 John incurred the following expenses in relation to his holiday home: Interest on the loan totalling $25,800. Insurance costs over the period of ownership costing $3,500. Stairs leading to the second storey were repaired at a cost of $1,800. Rates and land tax of $6,900 in total were paid during ownership of the property. Interest of $3,000 was paid since October 1996 when John obtained a personal loan to refurbish the kitchen and bathrooms at a cost of $25,000. Required: (a) Calculate Johns cost base (b) Calculate Johns indexed cost base. (c) Calculate Johns reduced cost base. (d) Calculate Johns net capital gain or loss.

Question 5 On 31 November 1999 John acquired a stamp for $750. John borrowed $400 of the money from Witch Bank. The loan was a fixed interest loan on which John paid interest of $45. John sold the stamp in October 2008 for $22,130. Required: Calculate the Net Capital Gain, if any, to be included in Johns assessable income.

Question 6 On 31 November 1999 John acquired a lounge for $10,100. John borrowed $900 of the money from Witch Bank. The loan was a fixed interest loan on which John paid interest of $145. John sold the lounge in October 2008 for $11,200. Required: Calculate the Net Capital Gain, if any, to be included in Johns assessable income.

Question 7 On 31 November 1999 Frank acquired a painting for $400. Frank borrowed the $400 from the Bank. The loan was a fixed interest loan on which Frank paid interest of $45. Frank sold the painting in October 2014 for $9,000. Required: Calculate the Net Capital Gain, if any, to be included in Franks assessable income.

Question 8 On 31 March 1997 Frank acquired a lounge suite for $9,999. Frank borrowed the $7,999 from the Bank. The loan was a fixed interest loan on which Frank paid interest of $4,444. Frank sold the lounge suite in October 2014 for $20,000. Required: Calculate the Net Capital Gain, if any, to be included in Franks assessable income.

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