Question
Bent Drill Pty Ltd is a drilling company located in northern SA. It has a post CGT property on which is located all of its
Bent Drill Pty Ltd is a drilling company located in northern SA. It has a post CGT property on which is located all of its drilling equipment and a large shed. As it now requires a larger storage area, it has sold the property. The details are as follows:
Purchase price $100,000 (contracts exchanged 15 Jan Year 1)
Sales price $200,000 on 31 December current income year 10
Year 1 is before the 1998/99 income year and the disposal year is after the 1998/99 income year. Which of the following statements is TRUE in relation to the sale of the property in Year 10?
Select one:
Bent Drill Pty Ltd must use the indexation method
Bent Drill Pty Ltd does not pay CGT
Bent Drill Pty Ltd can choose either Discount or Indexation method to calculate net capital gains.
Bent Drill Pty Ltd has no choice in which method to use, it must use the discount method.
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