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Mr Kang sold his home in which he has lived for the past 30 years. The...

Mr Kang sold his home in which he has lived for the past 30 years. The original cost of the house was $12,000. The house was sold under a contract dated 1 May 2009 for $700,000. The sale was finalised on 30 June 2009. Selling costs associated with the sale were $6000. Mr Kang also sold a parcel of 1000 shares in National Bank of Australia. These shares were purchased at a cost of $30 each on 30 November 2008 and sold for $44 each on 26 June 2009. He incurred $800 in stamp duty on the purchase and $300 in stockbroker’s fees on the sale. Based on this information, determine Mr Kang’s net capital gain or net capital loss for the year ending 30 June 2009.

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Answer #1

1. Sale price - Home : $ 700000

Less : Expenses    : $       6000

Capital Gain         :   $ 694000

2. Shares:

Sale Price : 1000@ $ 44    = $44000

Less : Stock broker fees =   $    300

Net Sale Price       =                43700

Purchase Price : 1000 @$30 = $30000

Add : Stamp duty =                        $   800

Total Purchase Price ===    $ 30800

Capital Gain = $ 43700-$30800=12900

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