Assuming that Mary is an Australian resident adult individual, calculate the net capital gain for Mary in relation to the following events and advise of the impact on taxable income for the income year ended 30 June 2021. Where possible, minimise the possible tax liability. Provide a full explanation citing relevant statute law and case law to support your answers. 1. Lottery Win Mary had entered a Boystown lottery and was fortunate enough to be the 1st prizewinner, winning a house. The market value of the house on 30 June 2021 (when the prize was announced) was $500,000 and the cost of the lottery ticket was only $20. 2. Sale of yacht Mary owned a yacht which was purchased for $9,500 in June 1995. The yacht sold for $28,500 on 30 June 2021. 3. Sale of rental property in Sydney Mary owned a rental property in Sydney, which was purchased for $200,000 in September 1984, and sold for $6,000,000 on 30 June 2021. 4. Sale of holiday home Mary purchased a block of land at Carrickalinga in South Australia with the intention of building a holiday home on the property. Before she was able to build the holiday home, a developer approached her and offered her more than double what she paid for it. This offer was too good to refuse! The purchase price of the land was $200,000 as shown in the contract entered into, dated July 2020. Fees on purchase of $10,000 included stamp duty, legal fees, conveyancing and transfer fees and borrowing expenses. Mary entered into a contract to sell the block of land on 30 June 2021 for $500,000, and she received this money on settlement in August 2021. Selling costs of $4,000 included commission and legal fees and conveyancing fees. 5. Losses from prior years Mary has prior year capital losses of $10,000. Assuming that Mary is an Australian resident adult individual, calculate the net capital gain for Mary in relation to the following events and advise of the impact on taxable income for the income year ended 30 June 2021. Where possible, minimise the possible tax liability. Provide a full explanation citing relevant statute law and case law to support your answers. 1. Lottery Win Mary had entered a Boystown lottery and was fortunate enough to be the 1st prizewinner, winning a house. The market value of the house on 30 June 2021 (when the prize was announced) was $500,000 and the cost of the lottery ticket was only $20. 2. Sale of yacht Mary owned a yacht which was purchased for $9,500 in June 1995. The yacht sold for $28,500 on 30 June 2021. 3. Sale of rental property in Sydney Mary owned a rental property in Sydney, which was purchased for $200,000 in September 1984, and sold for $6,000,000 on 30 June 2021. 4. Sale of holiday home Mary purchased a block of land at Carrickalinga in South Australia with the intention of building a holiday home on the property. Before she was able to build the holiday home, a developer approached her and offered her more than double what she paid for it. This offer was too good to refuse! The purchase price of the land was $200,000 as shown in the contract entered into, dated July 2020. Fees on purchase of $10,000 included stamp duty, legal fees, conveyancing and transfer fees and borrowing expenses. Mary entered into a contract to sell the block of land on 30 June 2021 for $500,000, and she received this money on settlement in August 2021. Selling costs of $4,000 included commission and legal fees and conveyancing fees. 5. Losses from prior years Mary has prior year capital losses of $10,000
