Answered step by step
Verified Expert Solution
Question
1 Approved Answer
The scenario: ABC Pty Ltd. purchased 5 acres of land, which had been used as land for grazing sheep, for $2 million. The company was
The scenario: ABC Pty Ltd. purchased 5 acres of land, which had been used as land for grazing sheep, for $2 million. The company was formed for the purpose of purchasing the land and grazing sheep on it and Mr and Mrs Jones owned all the shares in the company and were the directors of the company. Five years after the purchase, Mr and Mrs Jones are considering either selling the land or selling the shares in the company. The property was vacant for the entire time that Mr and Mrs Jones owned it (they did not live on the property). It was never used as grazing property. Mr and Mrs Jones have no knowledge or experience regarding how to graze sheep but had purchased and resold land on several occasions. Required: 1. Citing all relevant legislation and case law, advise Mr and Mrs Jones as to the income tax consequences of the below potential transactions: (a) The sale of the land by ABC Pty. Ltd.; and (b) The sale of the shares in the company by Mrs and Mrs Jones
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started