Evaluate the capital gain under the indexation method

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Reference no: EM13174199

Peter sold an investment property in Sydney and the transaction was settled on 30 June 2012 for $800,000. He incurred legal fees of $1,100 and a real estate agent's commission of $9,900 in relation to the sale. Peter purchased the investment property in March 1987 for $100,000. He paid $2,000 in stamp duty on the transfer and incurred legal fees of $1,000 in relation to the purchase.

a) Calculate the capital gain under the indexation method.

b) Calculate the capital gain under the 50% discount method.

c) Which method should be used in this case?

Reference no: EM13174199

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