Bill owns and has operated a bicycle shop in a major regional town since 1 July 2011. He lives 15 minutes from town on 5 hectares with his spouse. The property is on two titles. The 4 hectare block has their home and was purchased in joint names. The adjacent 1 hectare has a large shed and workshop/studio apartment that existed when the blocks were purchased and in which they lived while building the house and was purchased only in Bills name. Both properties were purchased at the same time, on 1 November 2009, and the home was completed and they moved in on 1 December 2010. The annual gross turnover from the bicycle shop last year was $1,200,000 and he expects this to increase by around 10% in the current year. Each year he arranges for the storage of bicycles purchased, if required by customers, in the shed for pick up in the week before Christmas. Generally these start to be stored from July. In addition he has stored some second hand trade-in bikes acquired mostly in February to October which he drops off at the Mens Shed every month. These are reconditioned by the Mens Shed members and donated to charity. He has undertaken these activities since July 2015. During the current year he has undertaken an extension to the shop premises which was finished in April costing $200,000. This additional space will discontinue the need for storage away from the shop. This assignment has two parts, both must be submitted and your submission should adopt the ILAC decision model. Ensure you note relevant legislation, case law or other supporting information as well as any additional information you may require. The report should follow the style guide below. Each part has a different submission date. The Part A response is to be based on the data provided below under the heading Assessment item 2. Part A Question As a result of the additional storage space Bill is considering the option to sell the 1 hectare containing the shed and workshop/studio apartment. The property was purchased for $300,000 and Bill has made no improvements during the time he has held the property and while he borrowed 80% of the purchase price he has now repaid 60% of his borrowings. He neighbour who is a Real Estate Agent has indicated he believes he could sell the property for $500,000. Required Determine the tax consequences of the sale? (You are NOT required to calculate any possible tax payable but should provide some indication of the amount of any possible assessable component). Your advice is to take the form of a report (adopting ILAC style) which will form part of the client work papers and should include a recommendation based on the known facts provided above as well as identifying any additional information that should be requested prior to providing any advice to the client.