Bill and Brittany's father, Stuart, died in January 2021. Under Stuart's will, Stuart gave Bill his investment property in Bathurst and his holiday house in Lithgow to Bill. Brittany was given Stuart's principal place of residence at Meadowbank. Stuart acquired the Bathurst property in 1980 for $200,000 and acquired the Lithgow property in 1995 for $400,000. At the date of Stuart's death, the Bathurst property was valued at $1,000,000 and the Lithgow property $800,000. Bill wants to sell both properties. Advise Bill on the CGT consequences of following through with the sale of both properties.
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- Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September 1986, Alex built a house on the land. At the time, the land was valued at $110,000 and the cost of construction was $100,000. Immediately, after the construction finished, the property has been rented out. On 1 March 2019, Alex sold the property at auction for $1,400,000. With reference to relevant legislation/case law determine: (A) Alex’s net capital gain or net capital loss for the year ended 30 June 2019 using both Discount method and Indexation method. (B) How would your answer to (A) differ if the owner of the property was a company instead of Alex?Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September1986, Alex built a house on the land. At the time, the land was valued at $110,000 and the cost ofconstruction was $100,000. Immediately, after the construction finished, the property has beenrented out. On 1 March 2019, Alex sold the property at auction for $1,400,000.Required:With reference to relevant legislation/case law, determine:a) Alex’s net capital gain or net capital loss for the year ended 30 June 2019 using both Discountmethod and Indexation method.show your working. b) How would your answer to a) differ if the owner of the property was a company instead of Alex?Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September1986, Alex built a house on the land. At the time, the land was valued at $110,000 and the cost ofconstruction was $100,000. Immediately, after the construction finished, the property has beenrented out. On 1 March 2019, Alex sold the property at auction for $1,400,000.Required:With reference to relevant legislation/case law, determine:a) Alex’s net capital gain or net capital loss for the year ended 30 June 2019 using both Discountmethod and Indexation method. (8 marks)b) How would your answer to a) differ if the owner of the property was a company instead of Alex?
- Judy’s mother, Sarah, died on July 2, 2018, leaving Judy her entire estate. Included in the estate was Sarah’s residence. Sarah’s basis in the residence was $30,000. The fair market value of the residence on July 2, 2018, was $155,000. The property was distributed to Judy on January 1, 2018. The Vances have held the property as a rental property and have managed it themselves and they started renting the house to the same tenant starting January 1, 2019. To compute depreciation on the house, the Vances had allocated $15,000 of the property’s basis to the land on which the house is located. The Vances collected rent of $1,000 a month during the months the house was rented during the year. They incurred the following related expenses during this period: Property insurance$500, Property taxes $800, Maintenance$465. For 2020, can she deduct qualified business income on form 1040?Judy’s mother, Sarah, died on July 2, 2018, leaving Judy her entire estate. Included in the estate was Sarah’s residence. Sarah’s basis in the residence was $30,000. The fair market value of the residence on July 2, 2018, was $155,000. The property was distributed to Judy on January 1, 2018. The Vances have held the property as a rental property and have managed it themselves and they started renting the house to the same tenant starting January 1, 2019. To compute depreciation on the house, the Vances had allocated $15,000 of the property’s basis to the land on which the house is located. The Vances collected rent of $1,000 a month during the months the house was rented during the year. They incurred the following related expenses during this period: Property insurance$500, Property taxes $800, Maintenance$465. Tax return 2019, how to compute rental home income.Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September 1986, Alex built a house on the land. At the time, the land was valued at $110,000 and the cost of construction was $100,000. Immediately, after the construction finished, the property has been rented out. On 1 March 2019, Alex sold the property at auction for $1,400,000.With reference to relevant legislation/case law, determine: a) Alex’s net capital gain or net capital loss for the year ended 30 June 2019 using both Discount method and Indexation method.
- Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September 1986, Alex built a house on the land. At the time, the land was valued at $110,000 and the cost of construction was $100,000. Immediately, after the construction finished, the property has been rented out. On 1 March 2019, Alex sold the property at auction for $1,400,000. With reference to relevant legislation/case law, determine Alex’s net capital gain or net capital loss for the year ended 30 June 2019 using both Discount method and Indexation method. How would your answer to a) differ if the owner of the property was a company instead of AlexAlex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September 1986, Alex built a house on the land. At the time, the land was valued at $110,000 and the cost of construction was $100,000. Immediately, after the construction finished, the property has been rented out. On 1 March 2019, Alex sold the property at auction for $1,400,000.Required: With reference to relevant legislation/case law, determine:a) Alex’s net capital gain or net capital loss for the year ended 30 June 2019 using both Discount method and Indexation method. b) How would your answer to a) differ if the owner of the property was a company instead of Alex? (maximum 100 words)Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September 1986, Alex built a house on the land. At the time, the land was valued at $110,000 and the cost of construction was $100,000. Immediately, after the construction finished, the property has been rented out. On 1 March 2019, Alex sold the property at auction for $1,400,000. Required: With reference to relevant legislation/case law, determine: a) Alex’s net capital gain or net capital loss for the year ended 30 June 2019 using both Discount method and Indexation method. (b) How would your answer to a) differ if the owner of the property was a company instead of Alex
- Colin McGregor and his wife Alice own a house in Kelowna as well as a condo at Big White. They purchased the house in Kelowna in 1997 for $270,000 and the condo in 2012 for $190,000. Both properties have been used exclusively by the McGregors. Early in 2021 the McGregors retired and put both properties up for sale. The condo sold in April for $420,000 and the house sold in July for $750,000. Determine the minimum capital gain that must be reported on the sale of the two properties.In 2018, Thalia purchased land for $900,000 and lists title in the names of her daughters as follows: “April and Theresa, joint tenants with right of survivorship.” In 2020, April and Theresa purchase an apartment building for $1 million as equal tenants in common; April furnished $400,000 and Theresa furnished $600,000 of the cost. April died before Theresa in 2021 when the land is worth $1.5 million and the apartment building is worth $2 million. One of the results of these transactions is: a. April made a gift to Theresa of $100,000 in 2020. b. None of the land is included in April’s gross estate. c. April’s gross estate includes $800,000 (40% × $2 million) as to the apartment building. d. April’s gross estate includes $1,750,000 as to these properties.Trevor died on 19 June 2020 leaving an estate valued at £720,000. Under the terms of his will, Trevor’s estate was left to his children. The estate included a main residence valued at £300,000. Trevor’s wife died on 5 May 2009. She used all of her nil rate band of £325,000. Find Out Inheritance Tax.