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# Capital Gains, GST Consequences, Main Residence Exemption, And Partnership Income Calculation

6 Pages / 1,316 Words Published On: 21-08-2020

## Capital Gains on Property and Shares

1.Mr Kang sold his home in which he has lived for the past 30 years. The original cost of the house was \$12,000. The house was sold under a contract dated 1 May 2009 for \$700,000. The sale was finalised on 30 June 2009. Selling costs associated with the sale Were \$6000. Mr Kang also sold a parcel of 1000 shares in National Bank of Australia.

These shares were purchased at a cost of \$30 each on 30 November 2008 and sold for \$44 each on 26 June 2009. He incurred \$800 in stamp duty on the purchase and \$300 in Stockbroker’s fees on the sale. Based on this information, determine Mr Kang’s net capital gain or net capital loss for the year ending 30 June 2009.

2.Collins Pty Ltd is a small company incorporated in Victoria, Australia. The company was incorporated in 2001 to manufacture plastic cups. Its sales revenue regularly exceeds \$100,000 each year. The company sells its plastic cups to a local retailer for \$3.40 per dozen. It also sells its plastic cups to a retailer in Fiji as the plastic cups have been very popular there for \$4.40 per dozen. On 1 January 2009, Collins purchased a car for \$34,000 which it provided to its managing director as he has to do a lot of travelling for work. The car was purchased from Car Retailer Pty Ltd, a large national car retailer with sales revenue in excess of a million dollars per year.

Advise Collins of its GST consequences arising from the above information.

2) How is the ‘net amount’ for a tax period calculated in GST? Why is this concept important?

3.Robert purchased his home on 1 July 2000. He lived in the home for two years and then was posted overseas for eight years, during which time he leased the house to tenants. On his return he continued to live in the home until it was sold on 30 June 2013.

Requirement:

Advise Robert as to whether he will be able to use the main residence exemption.

4.Rachel and Bill carry on a partnership together with gross receipts for the current income year of \$ 80,000. During the year the following

Wages to employees 10,000

Lease payments on two cars 4,000

Rachel and Bill share the profits in the ration of 3:1. Stock on hand at the beginning of the year was \$ 3,000 and at the end of the year was \$ 3,400. Both cars were used for business purposes, but Bill uses his 40% for private purpose as well. Bill also works part-time as a trainer and generated a gross income of 12,000. He subscribes magazines that update his knowledge on the industry and trainings to be provided to his own clients and it costs him \$ 800 in annual subscription fees. He also received fully franked dividends from ABC Company of \$1,125 in the current income year.

Requirements:

1. a) Calculate the net income of the partnership and the assessable income of the partners.
1. b) Calculate the final tax liability of Bill.

5.Errol provides his employee with the use of a car for 183 days during the FBT year. During this period the travelled 16000 km. Errol purchased the car last year for \$50,000. The employee contributed \$1000 towards the cost of running the car and has provided Errol with relevant

documentation.

Requirement:

Calculate the taxable value of the car fringe benefit using the statutory formula.

Cite This Work

My Assignment Help. (2020). Capital Gains, GST Consequences, Main Residence Exemption, And Partnership Income Calculation. Retrieved from https://myassignmenthelp.com/free-samples/ha3042-advising-collins-of-its-gst-consequences.

"Capital Gains, GST Consequences, Main Residence Exemption, And Partnership Income Calculation." My Assignment Help, 2020, https://myassignmenthelp.com/free-samples/ha3042-advising-collins-of-its-gst-consequences.

My Assignment Help (2020) Capital Gains, GST Consequences, Main Residence Exemption, And Partnership Income Calculation [Online]. Available from: https://myassignmenthelp.com/free-samples/ha3042-advising-collins-of-its-gst-consequences
[Accessed 30 September 2023].

My Assignment Help. 'Capital Gains, GST Consequences, Main Residence Exemption, And Partnership Income Calculation' (My Assignment Help, 2020) <https://myassignmenthelp.com/free-samples/ha3042-advising-collins-of-its-gst-consequences> accessed 30 September 2023.

My Assignment Help. Capital Gains, GST Consequences, Main Residence Exemption, And Partnership Income Calculation [Internet]. My Assignment Help. 2020 [cited 30 September 2023]. Available from: https://myassignmenthelp.com/free-samples/ha3042-advising-collins-of-its-gst-consequences.

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