Calculate the taxable capital gain

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Reference no: EM132642466

Question - Lisa's Darwin Home

Lisa sold her home in Darwin (contract date September 2019, settlement December 2019), receiving $1,220,000 at settlement. This is after legal fees ($12,000), advertising ($2,000) and real estate commissions ($25,000) were deducted.

Records indicate that Lisa purchased the property in 2002 (contract date January, settlement March) for $653,000. Legal fees, commissions and advertising of $8,000 were also incurred.

Lisa moved in within 6 months, selling her former residence during that time.

Over the ownership period, Lisa rented the property for eight years beginning December 2010, with $65,000 of $120,000 in non-capital costs claimed against rental income. The property was valued at $890,000 at the time it began being rented.

Sculpture

Lisa gave a sculpture, valued at $18,900, to her friend in June 2020. The sculpture was purchased for $480 in December 2000 and repaired in March 2016 for $1,250.

Vase

When Lisa was playing with her cat in September 2019, the cat accidentally knocked over and broke a vase given to her by her grandmother in September 2018 (worth $6,100 at that time). The vase dated back to the Australian gold rush (circa 1850's) and, after undertaking some research, she discovered it was currently worth approximately $27,000. Lisa did not have insurance for the item.

Cryptocurrency

Lisa converted cryptocurrency into $27,200 Australian dollars in October 2019. To complete the transaction, she incurred $950 in transaction fees. Therefore, Lisa received $26,250 in cash. Lisa had acquired the cryptocurrency in September 2018 for $9,200 Australian dollars.

Lisa sold shares she held in a construction company in March 2020 for $182,000. She had purchased the shares for $37,200 in December 1986.

Lisa has indicated that she has carried forward losses from prior years of $180,000 relating to a prior disposal of shares and land.

Extra information

Wages (Melbourne employment) - $125,000 net wages, PAYG withheld of $43,000 plus a bonus of $5,000 was paid.

Wages (Darwin employment) - $25,000 net wages, PAYG withheld of $1,500

Interest income $1,000

Allowable general deductions $3,300

Allowable specific deductions $1,000

Lisa is single with no private health insurance.

Lisa has no reportable fringe benefits or reportable superannuation contributions.

Required -

1. Calculate the taxable capital gain (loss) on the sale of the home on the basis that Lisa rented the home for a period of eight years.

2. Calculate the Lisa's Net Capital Gain.

3. Calculate the Lisa's Taxable Income.

4. Calculate the Lisa's Net Tax Payable.

Reference no: EM132642466

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