Reference no: EM132865276

Instruction: Please do research and then explain the following exercises in your own opinion and understanding, also make sure to input references (if any) as well.

Question 1 - During the income year, Bill made the following capital gains:

Capital gain of $10,000 on the sale of his shares in X Co (this is not a discount capital gain)

Capital gain of $10,000 on the sale of his shares in Y Co (this is a discount capital gain. He is eligible for a 50% discount)

He also made a capital loss of $5,000 on the sale of his land and he has a net capital loss from last year of $3,000.

Required - Calculate Bill's net capital gain.

Question 2 - In 2008, Barney purchased a holiday home near the beach for use by his family on weekends for $700,000. Barney was required to pay $40,000 stamp duty in respect of the transfer. He borrowed money from a bank to fund some of the purchase price and paid $20,000 in interest on the loan. Last year, he also paid $33,000 to a builder to renovate the kitchen in the property.

Required - What's the cost base of the property?