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Question 2  

David is in his late 50s and would like to plan for his retirement. David has visited his accountant last week (15th March 2019). As part of his plan he likes to contribute to his superannuation fund (i.e. BT Super for Life) before end of financial year this year. (i.e. 30 June 2019). 

David has different assets worth around $1m and plans to see these and contribute this to his super fund. He also wants to lease his house and withdrew tax free amounts from his super account when he turns sixty in august 2020. As part of his plan to collect $1m for his super investment, he has sold the following assets:

1- A house located at Doncaster (suburb of Melbourne). David lived in this property for the last 30 years. At that time, he bought the house for $70,000 and sold the house for $865,000 in an auction on Saturday 29th June 2019. Out of this, he paid $15,000 to the real estate agent for the sales commission. The buyer deposited $85,000 on the property, however after 14 days the buyer advised the real estate that he did not have enough money for proceed with the contract of [purchase, therefore forfaiting his deposit to David on 1st May 2019. After this the real estate agent started looking for another potential buyer. 

2- David has an artistic piece of painting by Margaret Preston. He purchased this on 20 September 1985 for $15,000. The painting was sold for $125,000 at an auction on 31 May 2019.

3-   David had a luxury yacht that he has since he was active member of Port Melbourne Yacht Club. He purchased the yacht in November 2004 for $110,000. Daniel sold the luxury yacht on 1st June 2019 for $60,000.

4- David had shares in BHP mining company, which he has purchased these shares on 10 January 2019 for $75,000 and sold all of these shares on 5 June 2019 for $80,000. Indeed, he got a loan of $70,000 in order to buy these shares and incurred $5,000 interest on the loan. David has paid $250 for stamp duty on the purchase, and $750 of brokerage fee on the sale of these shares. David spoke to his tax adviser and he has advised David that $5,000 interest incurred on the loan is a non-deductible expense. 

In his previous financial year’s tax return (i.e. 2017-2018) David has incurred a net capital loss of $10,000 from the sale of AZJ shares. AZJ shares were the only asset that he sold in 2017-2018 financial year. 

(a) Based on the above information, you are required to determine David’s net capital gain or net capital loss for the year ended 30 June 2019. 

(b) What David will do with a likely net capital gain in this financial year. 

(c) What David will do with a likely net capital loss in this financial year. 

 

For question 2, address the following parts

a) Based on the given information, students are required to determine David’s net capital gain or net capital loss for the year ended 30 June 2019. 

 

b) What David will do with a likely net capital gain in this financial year.

 

c) What David will do with a likely net capital loss in this financial year. 

 

 

 

ACC701 Financial Accounting

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LAWS5065-Taxation Law

Assignment Yvonne Merrick, the holder of a British passport and a relevant working visa, arrived in Australia from the UK in January 2015 and started work as an administrator in a Brisbane hospital. On 10 July 2017 she travelled back to the UK for personal reasons and worked in odd jobs until 1 Apr ...

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Specific Deductions and Tax Liability

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Fred is a resident who signed a contract to sell his holiday home in the Blue Mountains in August last year. The sale was settled in February this year when Fred received $800,000 from the purchaser. Fred incurred legal fees of $1100 (Inclusive of GST) and real estate agent’s commission of $9, ...

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ACC708 Taxation Law

Task: Section A (20 Marks) Baldrick bought an investment property on 1 July 2018 for $2,000,000. He rented out his property from 1 July 2018. He borrowed $1,800,000 on the same day from the bank to buy the property.   The term of the loan was 8 years. The building was originally constructed ...

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