Mollys mother passed away on 19 January 2021. On 7 June 2021, Molly sold the following items
Question:
Molly’s mother passed away on 19 January 2021.
On 7 June 2021, Molly sold the following items which she had inherited from her mother:
Item Inherited | Date Purchased by Mother | Cost to Mother | Market Value on Mother's Death | Capital Proceeds from Sale |
a. Pearl necklace | 15 July 1981 | $1,100 | $550 | $850 |
b. Diamond ring | 5 March 2005 | $520 | $900 | $920 |
c. Land at Coffs Harbour | 12 October 1995 | $100,000 | $265,000 | $280,000 |
d. Shares in BHP Limited | 25 November 1983 | $850 | $4,200 | $4,700 |
e. Shares in CSR Limited | 15 August 2020 | $2,200 | $2,100 | $2,400 |
f. Tennis racquet signed by Pat Rafter | 11 February 2004 | $6,500 | $10,900 | $12,000 |
Required:
Calculate Molly’s gross capital gain or capital loss in respect of the disposal of each asset.
Calculate Molly’s overall net capital gain or a capital loss. Assume that Molly wishes to minimize her taxable income by choosing the CGT method which gives her the lowest capital gain.
South-Western Federal Taxation 2020 Comprehensive
ISBN: 9780357109144
43rd Edition
Authors: David M. Maloney, William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman