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: a) Alex’s net capital gain or net capital loss for the year ended 30 June 2019 using both Discount method and Indexation method.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter11: Property Dispositions

Section: Chapter Questions

Problem 68P

See similar textbooks

Similar questions

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? (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
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 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?
Please quote the " sections "under Australian Taxation law for the following question 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. b) How would your answer to a) differ if the owner of the property was a company instead of Alex?
Ms. Jennie Smith owns a house in Ottawa. She purchased the house in 2002 for $122000. In June 2019, she sold the house for $220000 and designated the house as a principal residence for 5 years. Determine the minimum taxable capital gain that she must report on the 2019 sale of the house, after considering the principal residence exemption. Round to the nearest dollar. Do NOT write commas, dollar signs, or decimals in your response. Your Answer: Answer
Joe purchases a block of land in the western suburbs of Adelaide as an investment on 31 march 1988 for $50,000 incurring fees on purchase totaling $2,000. By 31 December 1988, he builds a house on the land costing $24,000. By 30 June 1990, he erects a large garage on the rear of the property costing $8,000. In May 2021, he decides to sell the investment property. On 1 June 2021 he enters in to contract to sell the property for $400,000 and receives payment on settlement on 31 July 2021, He incurs selling cost of $12,000 Calculate joe’s net capital gain for the financial year ending 30 June 2021 using both discounting and indexation methods if applicable. $152,000(discount method) and $236,224(indexation method) $152,000(discount method) and $272,448(indexation method) $76,000(discount method) and $272,448 (indexation method) $76,000(discount method) and $136,224(indexation method)
On 1 July 2000, Genevieve purchased a property in Sydney for $300,000 Her intention was to use it for income producing purposes and it was Immediately made available for rent. It remained available for rent until it was sold. She sold the property on 31 December 2019 for $600,000. Required: Based on this information, calculate the Net Capital Gain, if any, to be included in Genevieve's assessable income for year ending 30 June 2020
Genevieve bought a condo in Colorado for her personal use in 2018. She paid $250,000 at the time of sale. After a good-faith effort, it was determined that none of the cost was allocable to the land. In 2021, she replaced the furnace and air conditioning system for a total cost of $10,000. In 2022, she converted the property to a rental property. At the time of the conversion, the fair market value of the property was $300,000. What is the basis for depreciation of the condo?
In 2018, José purchased a house for $263,000. He used the house as his personal residence. In May 2021, when the fair market value of the house was $346,900, he converted the house to rental property. what is the cost recovery for 2021?
Anton purchases a building on May 4, 2002, at a cost of $370,000. The land is properly allocated $40,000 of the cost (total cost $410,000). Anton sells the building on October 18, 2020, for $370,000. If an amount is zero, enter "0". a. What is the character of Anton's gain or loss on the sale if he uses the regular MACRS system and the building is an apartment building? Assume the accumulated depreciation at the time of the sale is $208,990. The total gain would be _____, of which ______is Section 1250 recapture and_______is unrecaptured Section 1250. Any balance is considered a long-term capital gain . b. What is the character of Anton's gain or loss on the sale if he uses the regular MACRS system and the building is an office building? Assume the accumulated depreciation at the time of the sale is $147,384. The total gain would be_____, of which _____ is Section 1250 recapture and ______ is unrecaptured Section 1250. Any balance is considered Section 1231 gain