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Jacobs grandfather died on 1 November 2009 and, in her will, left Jacob cash and watches worth $500,000. The watches had been bought by Jacobs
Jacobs grandfather died on 1 November 2009 and, in her will, left Jacob cash and watches worth $500,000. The watches had been bought by Jacobs grandmother in August 1985 at a cost of $40,000, and its market value on 1 November 2009 was $150,000.
Jacob used the money from his grandfather and his savings to buy the following assets in January 2010:
- an apartment in Melbourne (cost was $360,000 plus $20,000 legal fees and stamp duty),
- a rare painting (cost was $50,000), and
- 2,000 bank shares (cost was $20 per share, plus $200 brokerage).
In 2019/20, Jacob disposed of these assets as follows:
- on 12 March 2020, he sold the apartment for $470,000 he had lived in it all the time he owned it,
- on 1 April 2020, the painting was stolen from his apartment he received $30,000 compensation from his insurance company,
- on 13 May 2020, Jacob sold 1000 bank shares for $30 per share (brokerage cost $150), and
- on 15 June 2020, he lost the watches, which wasnt insured, when he left his briefcase on a train.
Question 1.
Prepare a report that explains the CGT consequences of these transactions
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