Question 1

Mr khan got some cash worth $ 500,000 and collectibles in inheritance, and his ancestors died on November 2003. The collectibles were acquired by the ancestors before September 1985 at a cost of $ 20,000.

And these collectibles were worth $ 100,000 on the date of death.

From the inherited amount, Mr Khan bought some shares in BHP for$ 50,000. And he bought a house in Burwood for $ 400,000 in 2003, also he bought a painting for $ 20,000 on the same date.

During the current year the painting was stolen and there was no insurance on the painting. He sold the shares in BHP (2000 shares @ $50, commission $1/share)

In 2015 Mr khan sold his property in Burwood for $ 700,000 and started living with his parents. Mr khan before moving into his parents house he was living in his Burwood property.

In 2015 he sold a diamond ring which was inherited from his ancestors for $100,000. This item was purchased for $ 50,000 in 18^th century. The market value of this diamond on the date of death was $ 20,000.

CALCULATE THE CAPITAL GAINS TAX OF MR KHAN. (Australian tax law)