In preparation for an extended working holiday overseas, and to raise the money to pay for it, Fran sold off a significant number of her possessions. All sales took place in May 2014. The items she sold were:

a) Her Ford Falcon motor car. She had bought it second hand in August 2010 for$20,000 and had paid $400 for stamp duty on top of the purchase price. She sold it for$12,000.

b) Her jet-ski. She bought it in March 2011 for an 'all-inclusive' price of$11,500 and, in June 2012, she spent$1,000 having its propulsion system upgraded. She received$12,750 for it but paid$500 of that in commission to an agent who acted in the sale.

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c) 1,000 of the 2,000 BHP shares that she bought for $15 each in July 2012. When she bought them brokerage was $450 and stamp duty was $90. She financed the purchase with a loan from her bank and she paid half-yearly interest payments of $2,000 each in December 2012, June 2013 and December 2013 with an accrued interest liability of $1,750 when she sold the I ,000 shares in May 2014. She claimed and was allowed a deduction for all of her interest payments as an 'outgoing incurred in gaining or producing her dividend income' in the years in which the payments were made. She received $18,000 for the 1,000 shares she sold. She paid $270 in brokerage and $54 in stamp duty on the sale.

d) A figurine she had bought in a local antique shop in May 2012 for $750. There were no other costs associated with the purchase though she did insure it under a separate schedule to her 'contents' policy­ paying an extra $10 in premiums in May in 2012, 2013 and 2014. She sold it for $500.

All of Fran's capital transactions before this tax year had resulted in net capital gains which were appropriately dealt with in those years.

REQUIRED:

Calculate Fran's net capital gain or loss for the year AND indicate the amount that will be included in her taxable income for that year.

Answer rating: 100% (QA)

Motor Car 1200000 Jet Ski 1275000 Commission Agent 50000 Shares 1767600 Interest payments Dec 2012 J... View the full answer