Question 4 (14 marks in total) PNB Ltd shares for $4,000. These shares were received from Amy's grandmother's estate. The shares cost Amy's Grandmother $500 on 30 April 1985. Their mar- ket value was $2,000 on 1 April 2005 (the date of the Grandmother's death) and $3,200 on 1 December 2005 (the date Amy received the shares from the estate). a. Nasser Hussien, an Australian resident for tax purposes, pur- chased a residence in Newcastle on 1 January 2005 at a cost of $235,000. He lived in the house as his main residence from that date until 1 January 2016 when he was transferred to Brisbane by his employer. On that date the Newcastle house had a market value of $300,000. Nasser's employer provided him with rental accommodation in Brisbane and he owned no other property. Nasser received rental income from the Newcastle house from 1 January 2016 until it was sold for $375,000 on 30 November 2019. Amy also had a carried forward capital loss of $500 in respect of the sale of a block of land in the 2019 income tax year. Required Calculate the minimum amount of capital gain, if any, to be in- cluded in Amy's assessable income for the year ended 30 June 2020. Required (4 marks) Calculate the minimum amount of capital gain, if any, to be in- cluded in Hussien's assessable income. (4 marks) Question 4 (Cont.) b. On 30 June 2020 Amy May, an Australian resident, sold the fol- lowing assets: Diamond Ring for $3,000. The ring was an unwanted en- gagement present given to Amy by her ex-boyfriend on 1 September 2019. The ring had cost her ex-boyfriend $2,000 on that day. c. Bob Cat, aged 39, sold his marketing business to a new operator on 1 June 2020. The sale contract provided that Bob would receive a total of $120,000 consisting of $110,000 for the good- will of the business and $10,000 as a restrictive covenant on his undertaking not to establish a competing business. Bob had commenced the business on 1 July 2010. He operated from rented premises and had no business assets other than the good- will of the business. Bob had attracted the client base himself and had never paid for any of the goodwill. Bob's business was registered for the GST. Bob paid the proceeds of the busi- ness sale against his private mortgage. . Grand Piano for $11,000. The piano cost $8,500 when purchased on 1 April 2005. Required i. Calculate the minimum capital gain, if any, the taxpayer must include in their assessable income. (4 marks) ii. Calculate the amount of GST, if any, Bob would have to account for in respect of the above contract for sale of the business. (2 marks)
