FNSACC601 - Task 9 – Capital Gains

Task 9 – Capital Gains

Christine is a married resident taxpayer with no dependants. The following has been taken from her taxation records.

Private Residence

• Private residence purchased in March 1998 for $300,000.
• Christine currently lives in the house and its market value as at 30 June 2018 is $900,000.

Rental Property in Cairns

• Purchased on 7/8/89 for $150,000 (the property was built in 1971).
• Exchanged contracts for the sale of this property on 30 June 2018 for $850,000.
• Settlement of the sale was finalised on 12 October
• Legal expenses on purchase $4,000 paid August
• Stamp duty on purchase $2,500 paid August
• Additional room added to property paid for on 1 July 2013 for $20,000.
• Landscaping to the property paid for on 1 July 2005 for $2,000.
• Legal expenses on sale $5,000 paid June
• Real estate agents commission on sale $4,500 paid June

Shares

• Dragon Ltd shares sold on 11 February 2018 for $20,000, purchased on 1 May 1985 for $8,000.
• Raider Ltd shares sold on 20 April 2018 for $11,000, purchased on 1 July 2006 for $10,000.
• Eel Ltd shares sold on 2 August 2017 for $120,000, purchased 1 May 2006 for $30,000.
• Tiger Ltd shares sold on 30 June 2018 for $40,000, purchased on 1 April 2018 for $16,000.

Other information

• Christine has capital losses carried forward from the previous year of $8,000.
• Rental income from her Cairns property from 1 July 2017 to date of sale $12,000.
• Total allowable deductions in respect of this rental income for the year ended 30 June 2018 was $15,800 (including capital write off 5% x $20,000 = $500).

Required:

• Calculate the net capital gain for Christine for the year ended 30 June 2018 by using the CGT method that provides the best outcome for
• Calculate the taxable income of Christine for the year ended 30 June 2018.