Question

Bala, an Australian resident for tax purposes, disposed of the following assets:

a) Sold his car (acquired 8 April 2015 for $24,000) on 21 May 2020 for $12,000.

b) Sold an Ann Fung acrylic painting (acquired 8 April 2016 for $10,000) on 10 April 2020 for $5,000.

c) Sold his home (acquired 31 December 1984 for $30,000) on 6 June 2020 for $350,000.

d) Sold 2,000 XYZ Bank shares on 1 June 2020 for $100,000. The brokerage fee for the sale was $1,000. The shares were acquired on 2 Dec 1998 for $40,000 and the brokerage fee at the time was $400.

The above transactions are the only relevant transactions for the 2019/20 income year. Calculate Bala’s net capital gain or loss for the year ending 30 June 2020. Note: For the year ending 30 June 2019, Bala had a net capital loss of $3,000.

Answer 1

a)motor car is exempt from capital gain tax ,so the calculation is noit needed .the capital gain tax fro car is =0

motor car capital gain tax=0

b)painting is acquired for more than $5000,so it is taxable .

the painting is held fro motre than 1 year so tax is exempted (50% will be taken for calculation0

capital gain=50% of (10000-5000)=$2,500

c)$250,000 profit from sale of home is exempt

remaining $100,000,capital gain would be =50%(100,000-30,000)=$35000

d)holdong period is more than 1 year ,so 50% will be taken for capital gains.

capital gain=50%(100,000-40,000)=$30,000

net capital gain/loss=0+$2500+$35000+$30000+($3000)

=$64,500