Calculate the cost base for this asset
1. Candy purchased a 3 bedrooms house in St Kilda on the 1’s March 2015 for the cost of
$1.3M. She paid a stamp duty on the transaction for $74,750. She also incurred legal fees of
$3,500. She then rent the apartment out straight away for the amount of $30,000/year net.
In the year of 2017, she renovated the kitchen and bathroom for the cost of $150,000 to
make the house looks more modern.
Candy finally sold the house in November 2019 for $2.15M, incurring legal costs of $4,500
and agent’s commission of $40,000.
Candy also incurred interest on the amount borrowed to purchase the property of $120,000
and council rates totalling $20,000
Required:
• Calculate the cost base for this asset
• Calculate the
• Calculate Candy’s assessable income for Income year 19/20 assuming she made a salary
of $90,000, net rental ncome of $30,000 an capital loss of $4,250 from the sale of some
shares (purchased 10 years ago)
• Would your answer will be different if Candy stay at the home as her main residence
instead of renting it out?
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