In May 2020, Tran and Song are approached by a timber merchant (Hayley) who wants to purchase
Question:
In May 2020, Tran and Song are approached by a timber merchant (Hayley) who wants to purchase and cut down some trees on the land.
The following agreement is entered into:
1. Tran and Song agree to sell to Hayley 1,200 cubic metres of timber for $30,000.
2. Hayley is required to cut down the timber and remove it from the land during April-June 2021.
3. Hayley, her employees and contractors are permitted to enter the land to facilitate the removal of the timber subject to sale.
4. Hayley, her employees and contractors are permitted to enter the land to construct roads and pathways reasonably necessary for removal of the trees from the land. Hayley is required to restore the land as close as possible to its previous condition.
5. If less than 1,200 cubic metres of timber is found on the property, the sale price of $30,000 is reduced in proportion to the shortfall in timber (e.g. a shortfall of 200 cubic metres would reduce the price to $25,000).
Hayley removes the 1,200 cubic metres as agreed and Tran and Song receive payment of $30,000 on 7 July 2021. The solicitor that represented Tran and Song in respect to the agreement with Hayley charged Tran and Song $1,200 for her services. Advise Tran and Song on the CGT consequences of the above.
Financial Algebra advanced algebra with financial applications
ISBN: 978-0538449670
1st edition
Authors: Robert K. Gerver