Shannon Johnstone is an Australian resident taxpayer. In the 2019/2020 income tax year, he entered into the following transactions relating to his ownership of assets. Assume that Shannon is not entitled to use any of the small business concessions in Division 152 ITAA 1997.

Jet Ski

Shannon loves spending time at the beach with friends. Most of his friends own a jet ski, therefore in October 2019 he purchased his first single seat jet ski for $8,000. He used the jet ski a lot over the summer and realised he should have purchased a triple seat jet ski so Lucy can be included too. Shannon approaches a jet ski retailer and decides to purchase a new three-seater jet ski on 1 May 2020 for $18,000. The retailer offers to trade Shannons single seat jet-ski on the purchase of the new jet ski. The trade in price offered is $6,000, leaving a balance of $12,000 that Shannon pays on the day of collection.

Book collection

Shannon owns three first edition novels from the Chronicles of Narnia series. The first book The Horse and His Boy cost $310 and was purchased on 21 October 1985. The second and third novels, The Silver Chair and The Lion, The Witch and The Wardrobe were purchased together from a book collector on 1 March 1996. The purchase price for each novel was $350 and $480 respectively. Shannon decides to sell the books to help fund his business venture Warm or Frosty Pet Mats. The Lion, The Witch and The Wardrobe sells first for $11,000 on the 15 January 2020. The remaining two books are sold to the same book collector on 18 April 2020 with $3,800 realised for The Horse and His Boy and The Silver Chair is sold for $4,500.

Industrial property 180 Frankston Dandenong Road, Dandenong South, Victoria

On 20 June 2017, Shannon signed a contract to purchase an industrial building in Dandenong. The ownership of the building transferred to him on 18 July 2017. Shannon rented the industrial building to an engineering company from the 18 July 2017 until he sold it. The engineering company signed a contract to purchase it on 24 June 2020 and the ownership transferred from Shannon to the engineering company on 1 July 2020.

The industrial building cost $480,000 when Shannon purchased it and he sold it for $900,000. Shannon incurred legal fees of $3,200 and paid stamp duty of $9,600 as part of the purchase.

House 29 Merle Street Greenslopes

Shannon signed a contract to purchase a house (on 0.2 hectares) at 29 Merle Street Greenslopes on 12 June 2010 for $500,000. The title of the house passed to Shannon on 12 July 2010. On 30 July 2017 Shannon moved out of the house and relocated to Sydney to further a business venture. He rented a house in Sydney and has lived in that house since 31 July 2017.

The house at 29 Merle Street was rented to tenants from 31 July 2017 until 24 April 2020. On 1 April 2020, Shannon sold the Merle Street house under contract for $800,000. The property transferred to the buyer on 31 May 2020.

Other information

Shannon also advises you that he has a carried forward capital loss of $4,000 from the previous sale of land and a carried forward capital loss of $360 from his stamp collection.

Required:

You are required to determine Shannon Johnstones net capital gain for the 2019/20 income year. In order to do so you should consider the transactions listed above and carry out the necessary steps to determine whether a capital gain or loss is realised for each transaction before carrying out the necessary steps to calculated net capital gain. You should also consider the other information related to losses from previous years.