Taxation Questions

Q1: Anna sold her home in Darwin (contract date September 2019, settlement December 2019), receiving $1,220,000 at settlement. This is after legal fees ($12,000), advertising ($2,000) and real estate commissions ($25,000) were deducted.

• Records indicate that Anna purchased the property in 2002 (contract date January, settlement March) for $653,000. Legal fees, commissions and advertising of $8,000 were also incurred.
• Anna moved in within 6 months, selling her former residence during that time.
• Over the ownership period, Anna rented the property for three years beginning December 2010, with $65,000 of $120,000 in non-capital costs claimed against rental income. The property was valued at $890,000 at the time it began being rented.

Determine the taxable capital gain (loss) on the sale of the home. Briefly justify your answer/show all workings

Q2: Anna gave a sculpture, valued at $18,900, to her friend in June 2020. The sculpture was purchased for $480 in December 2000 and repaired in March 2016 for $1,250.

Determine the taxable capital gain (loss) on the sale of the Sculpture. Briefly justify your answer/show all workings

Q3: When Anna was playing with her cat in September 2019, the cat accidentally knocked over and broke a vase given to her by her grandmother in September 2018 (worth $6,100 at that time). The vase dated back to the Australian gold rush (circa 1850's) and, after undertaking some research, she discovered it was currently worth approximately $27,000. Anna did not have insurance for the item

Determine the taxable capital gain (loss) on the sale of the Vase. Briefly justify your answer/show all workings