Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1September1986, Alex built a house on the land. At the time, the land was valued at $110,000 and the costofconstruction was $100,000. Immediately, after the construction finished, the property hasbeenrented out. On 1 March 2019, Alex sold the property at auction for $1,400,000.Required:With reference to relevant legislation/case law, determine:a) Alex's net capital gain or net capital loss for the year ended 30 June 2019 using bothDiscountmethod and Indexation method.b) How would your answer to a) differ if the owner of the property was a company instead ofAlex?

Profit on sale totals on sale 1,400,000.00 less:cost of land (110,000.00) cost of…

Answered: Alex is a carpenter who purchased a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sarah (single) purchased a home on January 1, 2008, for $600,000. She eventually sold the home for $800,000. What amount of the $200,000 gain on the sale does Sarah recognize in each of the following alternative situations? (Assume accumulated depreciation on the home is $0 at the time of the sale.) Note: Leave no answer blank. Enter zero if applicable. a. Sarah used the home as her principal residence through December 31, 2019. She used the home as a vacation home from January 1, 2020, until she sold it on January 1, 2023. Answer is complete but not entirely correct. Gain recognized $ 50,000
Troy (single) purchased a home in Hopkinton, Massachusetts, on January 1, 2007, for $310,000. He sold the home on January 1, 2022, for $330,200. How much gain must Troy recognize on his home sale in each of the following alternative situations? Note: Leave no answer blank. Enter zero if applicable. Required: Troy rented out the home from January 1, 2007, through November 30, 2008. He lived in the home as his principal residence from December 1, 2008, through the date of sale. Assume accumulated depreciation on the home at the time of sale was $16,800. Troy lived in the home as his principal residence from January 1, 2007, through December 31, 2017. He rented out the home from January 1, 2018, through the date of the sale. Assume accumulated depreciation on the home at the time of sale was $3,900. Troy lived in the home as his principal residence from January 1, 2007, through December 31, 2019. He rented out the home from January 1, 2020, through the date of the sale. Assume…
Alex is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1 September 1986, Alex built a house on the land. At the time, the land was valued at $110,000 and the cost of construction was $100,000. Immediately, after the construction finished, the property has been rented out. On 1 March 2019, Alex sold the property at auction for $1,400,000.Required: With reference to relevant legislation/case law, determine:a) Alex’s net capital gain or net capital loss for the year ended 30 June 2019 using both Discount method and Indexation method. b) How would your answer to a) differ if the owner of the property was a company instead of Alex? (maximum 100 words)
Moran owns a building he bought during year 0 for $223,000. He sold the building in year 6. During the time he held the building, he depreciated it by $53,500. What are the amount and character of the gain or loss Moran will recognize on the sale in each of the following alternative situations? (Loss amounts should be indicated by a minus sign. Enter NA if a situation is not applicable. Leave no answer blank. Enter zero if applicable.) Problem 11-44 Part-a (Algo) a. Moran received $200,000. Description Amount Total Gain/(Loss) Recognized Unrecaptured §1250 gain (and §1231 gain) Remaining §1231 gain (loss)
* Explain.
Bill and Brittany's father, Stuart, died in January 2021. Under Stuart's will, Stuart gave Bill his investment property in Bathurst and his holiday house in Lithgow to Bill. Brittany was given Stuart's principal place of residence at Meadowbank. Stuart acquired the Bathurst property in 1980 for $200,000 and acquired the Lithgow property in 1995 for $400,000. At the date of Stuart's death, the Bathurst property was valued at $1,000,000 and the Lithgow property $800,000. Bill wants to sell both properties. Advise Bill on the CGT consequences of following through with the sale of both properties.

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