On 1 July 2014 Marcus, (an adult Australian Resident) bought a property for $550,000. He used it as a rental property and collected rent throughout the ownership period He incurred the following expenses in relation to this property:
 

Legal Fees  (incurred at purchase)                                                $6,000
 

Stamp Duty (incurred at purchase)                                               $18,000
 

Council Rates and Taxes incurred over the ownership             $30,000

Agents Commission for selling the property                               $29,000
 

Legal Fees to defend his title over a portion of the garden
claimed by a neighbor in June 2016                                            $30,000

Interest payment of $18,400 to the NAB bank for the mortgage repayments of $36,000 to replace the leaking old roof after purchasing the property so that he can rent the property out to tenants. A speeding fine of $560 when he drove his car too fast to collect the roofing materials from Bunnings before they closed.

He sold the property on 30 June 2022 for $800,000
 

Required:
 

(a) Calculate the COST BASE of the property
 

(b) Calculate his NET ASSESSABLE CAPITAL GAIN
 

(c) He wants to know how his Net Capital Gain will be taxed. Explain the tax consequences and refer to the law. 

This question requires explanation of the legal principles involved as well as calculations.

Answer rating: 100% (QA)

To calculate Marcus cost base net assessable capital gain and the tax consequences we need to follow the Australian tax rules Heres a stepbystep break... View the full answer