Harvey acquired shares in Macquarie Bank in December 2019 for $90,000. He needed cash quickly and so sold the shares in March 2020 for $120,000. What amount must Harvey include in his assessable income for the year ended 30 June 2020? a. $100,000 b. $35,000 c. $50,000 d. $30,000

Harvey acquired shares in Macquarie Bank in December 2019 for $90,000. He needed cash quickly and so sold the shares in March 2020 for $120,000. What amount must Harvey include in his assessable income for the year ended 30 June 2020? a. $100,000 b. $35,000 c. $50,000 d. $30,000

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter5: Gross Income: Exclusions

Section: Chapter Questions

Problem 4BCRQ

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Harvey acquired shares in Macquarie Bank in December 2019 for $90,000. He needed cash quickly and so sold the shares in March 2020 for $120,000. What amount must Harvey include in his assessable income for the year ended 30 June 2020?

	a.	$100,000
	b.	$35,000
	c.	$50,000
	d.	$30,000

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