On 1 August 2022, Capricorn Holdings Pty Ltd acquires a property (consisting of a large block of land and a commercial office building) for an amount of $5.8 million. The company engaged a quantity surveyor to determine the breakdown of the costs relating to the property. The quantity surveyor’s report reveals the following cost information.
3. On 1 August 2022, Capricorn Holdings Pty Ltd acquires a property (consisting of a large block of land and a commercial office building) for an amount of $5.8 million.
The company engaged a quantity surveyor to determine the breakdown of the costs relating to the property. The quantity surveyor’s report reveals the following cost information.
$Cost of land1 200 000
Demolition of old building on site
(April 2015)
40 000
Pre-construction site clearance
(May 2015)
170 000
Construction of new building
(August 2015)
2 600 000Landscaping (March 2017)32 000
The company leased the commercial office building to tenants on 22 August 2022. It was rented out to tenants from 22 August 2022 to 30 June 2023 inclusive.
Required:
Calculate Capricorn Holdings Pty Ltd’s deduction for capital works expenditure(Division 43) for the year ended 30 June 2023. Please quote appropriate sections of the ITAA (1997) in your answer. Please round all calculations to the nearest whole dollar.
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