Benjamin is an artist. He sold some assets last week. He requests you to calculate the Capital Gain Tax (CGT) consequences of the following transactions: He purchased the following items last eight months ago. an antique ceramic bowl (for $4,000),An antique vase (for $5,000),A colourful painting (for $15,000),A TV sound system for his personal use (for $10,000) andShares of a reputed Company (for $6,000) Last week he sold these assets as follows: an antique ceramic bowl (for $6,000),An antique vase (for $1,000),A colourful painting (for $ 5,000),A TV sound system for his personal use (for $9,000) andShares of a reputed Company (for $26,000) Based on the legal provisions, discuss capital gain tax assets and calculate his net capital gain or net capital loss for the current tax year

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Answered: is an artist. He sold some assets last…

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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Benjamin is an artist. He sold some assets last week. He requests you to calculate the Capital Gain Tax (CGT) consequences of the following transactions:

He purchased the following items last eight months ago.

an antique ceramic bowl (for $4,000),
An antique vase (for $5,000),
A colourful painting (for $15,000),
A TV sound system for his personal use (for $10,000) and
Shares of a reputed Company (for $6,000)

Last week he sold these assets as follows:

an antique ceramic bowl (for $6,000),
An antique vase (for $1,000),
A colourful painting (for $ 5,000),
A TV sound system for his personal use (for $9,000) and
Shares of a reputed Company (for $26,000)

Based on the legal provisions, discuss capital gain tax assets and calculate his net capital gain or net capital loss for the current tax year

Definition Definition Tax imposed by the government on the "gain" or increase in the value of an asset at the time of its sale by the owner. Capital gain is computed based on the purchase price and sale price of the asset. If the sale price of the asset is more than the purchase price, there is a gain on the sale of asset. A tax is imposed on such gain in accordance with the applicable tax rates at the time of sale.

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