Part B During the year ended 30 June 2021, Supriya entered into the following transactions: 1. A parcel of Alpha shares was purchased for $12,000 on 1 December 2020 . 2. She incurred a capital loss of $2,500 on the sale of Beta shares. 3. She incurred a capital loss of $250 on collectables. During the year ended 30 June 2022, Supriya entered into the following transactions: 1. Sold Alpha shares for $13,000 on 15 November 2021 . 2. Sold Gamma shares which were purchased on 1 January 2005 at a cost of $6,000. During her years of ownership, she received dividends from the shares totalling $3,000. She borrowed money to buy the shares and the total interest paid during her period of ownership was $1,500. She sold the shares on 1 July 2021 for $10,000. 3. Supriya owns a house as an investment property at the Gold Coast which she rents out. The house was purchased on 1 February 2017 for $750,000. At the time of signing the contract for the purchase she paid a deposit of $150,000. She obtained a mortgage from Orange bank (an Australian bank) for $600,000. Settlement (i.e transfer of ownership) occurred on 1 May 2017. The mortgage was for 25 -years and had an interest rate of 4% per annum. Interest is payable the first day of each month. (Note: For ease of any required calculations, you can assume this is an interest only loan - this means only the interest is paid each month. The principal remains fixed. You can also assume, for ease of calculation that the interest is not compounded). In addition to the cost of the property, Supriya incurred the following costs at the time of purchase: - Stamp duty (on house): $30,000 - Legal (conveyancing) fees: $1,300 - Mortgage broker commission: $1,500 - Application fee for mortgage: $500 As noted above, Supriya purchased the house as an investment property. At the time settlement of the property occurred, there were existing tenants living in the property. These tenants continued to live in the property once Supriya purchased it, paying rent of $700 per week. They moved out of the property on 1 July 2017. Before re-advertising the property for rental, Supriya decided to install an in-ground swimm ing pool. The construction of the pool started on 15 July 2017 and is completed on 1 August 2017 . The total cost of construction is $20,000. Once construction was completed, she advertised the property for rental again. She incurs a total of $800 in advertising expenses. A tenancy/rental agreement is signed with new tenants on 14 August 2017, and they move into the property on 20 August 2017, paying $750 per week in rent. The tenants move out of the property on 1 July 2021 when she decides to sell the investment property. Her real estate agent says she should repaint the house before selling it as this will increase the sale price. Painters commence painting the property on 10 July 2021 and finish their work on 25 July 2021 . The cost of repainting the property was $16,000. Supriya advertised the property for sale (via her real estate agent) on 1 August 2021 for $1,350,000. On 15 August 2021, a buyer offers Supriya $1,300,000 for the property. Supriya accepts the offer. On the same day, a deposit of $300,000 is paid. Settlement (i.e., transfer of ownership) occurs on 30 September 2021 at which time the remaining $1,000,000 for the house is paid. Costs associated with sale include: - Advertising: $3,200 - Real estate commission: $25,000 - Legal fees: $1,400 Supriya repays her mortgage to Orange Bank on 30 September 2021. (You can also assume, for ease of calculation that the interest is not compounded). Required: - Discuss the income tax implications of the above transactions and calculate the net capital gain/loss for Supriya for the year ended 30 June 2022 . Show all relevant calculations and indicate the likely way in which the capital losses will be applied in calculating the net capital gain, if any, for the year. Your answer must be supported by reference to relevant income tax legislation, tax cases and/or other authorities. The calculations should be included in the assignment and not an appendix. You are to ignore GST for the purposes of this question. - Apart from the transactions listed in this question, you can assume Supriya has no other transactions that will impact on any net capital gain (or net capital loss) calculation. - You should assume that Supriya wants to make use of any available elections/exemptions to minimise her net capital gain for each year. Part B During the year ended 30 June 2021, Supriya entered into the following transactions: 1. A parcel of Alpha shares was purchased for $12,000 on 1 December 2020 . 2. She incurred a capital loss of $2,500 on the sale of Beta shares. 3. She incurred a capital loss of $250 on collectables. During the year ended 30 June 2022, Supriya entered into the following transactions: 1. Sold Alpha shares for $13,000 on 15 November 2021 . 2. Sold Gamma shares which were purchased on 1 January 2005 at a cost of $6,000. During her years of ownership, she received dividends from the shares totalling $3,000. She borrowed money to buy the shares and the total interest paid during her period of ownership was $1,500. She sold the shares on 1 July 2021 for $10,000. 3. Supriya owns a house as an investment property at the Gold Coast which she rents out. The house was purchased on 1 February 2017 for $750,000. At the time of signing the contract for the purchase she paid a deposit of $150,000. She obtained a mortgage from Orange bank (an Australian bank) for $600,000. Settlement (i.e transfer of ownership) occurred on 1 May 2017. The mortgage was for 25 -years and had an interest rate of 4% per annum. Interest is payable the first day of each month. (Note: For ease of any required calculations, you can assume this is an interest only loan - this means only the interest is paid each month. The principal remains fixed. You can also assume, for ease of calculation that the interest is not compounded). In addition to the cost of the property, Supriya incurred the following costs at the time of purchase: - Stamp duty (on house): $30,000 - Legal (conveyancing) fees: $1,300 - Mortgage broker commission: $1,500 - Application fee for mortgage: $500 As noted above, Supriya purchased the house as an investment property. At the time settlement of the property occurred, there were existing tenants living in the property. These tenants continued to live in the property once Supriya purchased it, paying rent of $700 per week. They moved out of the property on 1 July 2017. Before re-advertising the property for rental, Supriya decided to install an in-ground swimm ing pool. The construction of the pool started on 15 July 2017 and is completed on 1 August 2017 . The total cost of construction is $20,000. Once construction was completed, she advertised the property for rental again. She incurs a total of $800 in advertising expenses. A tenancy/rental agreement is signed with new tenants on 14 August 2017, and they move into the property on 20 August 2017, paying $750 per week in rent. The tenants move out of the property on 1 July 2021 when she decides to sell the investment property. Her real estate agent says she should repaint the house before selling it as this will increase the sale price. Painters commence painting the property on 10 July 2021 and finish their work on 25 July 2021 . The cost of repainting the property was $16,000. Supriya advertised the property for sale (via her real estate agent) on 1 August 2021 for $1,350,000. On 15 August 2021, a buyer offers Supriya $1,300,000 for the property. Supriya accepts the offer. On the same day, a deposit of $300,000 is paid. Settlement (i.e., transfer of ownership) occurs on 30 September 2021 at which time the remaining $1,000,000 for the house is paid. Costs associated with sale include: - Advertising: $3,200 - Real estate commission: $25,000 - Legal fees: $1,400 Supriya repays her mortgage to Orange Bank on 30 September 2021. (You can also assume, for ease of calculation that the interest is not compounded). Required: - Discuss the income tax implications of the above transactions and calculate the net capital gain/loss for Supriya for the year ended 30 June 2022 . Show all relevant calculations and indicate the likely way in which the capital losses will be applied in calculating the net capital gain, if any, for the year. Your answer must be supported by reference to relevant income tax legislation, tax cases and/or other authorities. The calculations should be included in the assignment and not an appendix. You are to ignore GST for the purposes of this question. - Apart from the transactions listed in this question, you can assume Supriya has no other transactions that will impact on any net capital gain (or net capital loss) calculation. - You should assume that Supriya wants to make use of any available elections/exemptions to minimise her net capital gain for each year