Distinguish any CGT issues on Grundnorm's case.
Title: Distinguish any CGT issues on Grundnorm's case.
Category: /History/Middle East History
Details: Words: 1619 | Pages: 6 (approximately 235 words/page)
Distinguish any CGT issues on Grundnorm's case.
Category: /History/Middle East History
Details: Words: 1619 | Pages: 6 (approximately 235 words/page)
Question on Capital Gains Tax Due Week 11:
Effect of death: s 128:
Death is generally not a CGT event (s 128). There is an exception under CGT event K3 s 104-215 that covers leaving assets to exempt entities as defined in s 995-1. In this case, Grundnorm's uncle died and left him a property consisting of a house and 10 hectares of land and some collectables and a yacht. There was no evidence to show that Grundnorm was
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Sales proceed of the property(including the compensation) $2,050,000
Cost base
Acquisition cost--House: $200,000
---Land: $600,000
Incidental cost---solicitor fee: $20,000
Capital enhancement cost---Demolish: $40,000
---Build Units: $400,000
Total cost base $1,260,000
Capital gain $790,000
Watch:
Sales proceed $2,000
Reduced cost base $15,000
Capital loss $13,000 (can be used only to reduce capital gains from earrings: s 108-10, thus, the net capital loss was $12,500).
Earrings:
Market value $1,500
Cost base $1,000
Capital gain $500
Yacht:
Market value $40,000
Reduce cost base $50,000
Capital loss $10,000 (can be disregarded: s108-20)
Net Capital gain= 790,000*50%= $395,000