On 1 July 2017, Micah Wong, a resident taxpayer aged 58, sold his mortgage broking business...

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On 1 July 2017, Micah Wong, a resident taxpayer aged 58, sold his mortgage broking business for $2,675,000 and retired. The proceeds are entirely for goodwill and the cost base for this asset consists solely of second element costs on disposal of $35,000. Micah commenced business in 2008 and does not have any other current or prior year capital gains or losses. His business satisfies the requirements of Subdivision 152-C. Required: a. Does the 50% CGT discount apply? b. Does the Small Business Active Asset reduction apply? c. Does the Small Business Retirement Concession apply? d. Calculate Micah's net capital gain for the 2017/18 tax year (use grid provided to show your workings): Gain on Sales of business Net Capital Gain Yes/No? Calculation details (if any) $ $ $ On 1 July 2017, Micah Wong, a resident taxpayer aged 58, sold his mortgage broking business for $2,675,000 and retired. The proceeds are entirely for goodwill and the cost base for this asset consists solely of second element costs on disposal of $35,000. Micah commenced business in 2008 and does not have any other current or prior year capital gains or losses. His business satisfies the requirements of Subdivision 152-C. Required: a. Does the 50% CGT discount apply? b. Does the Small Business Active Asset reduction apply? c. Does the Small Business Retirement Concession apply? d. Calculate Micah's net capital gain for the 2017/18 tax year (use grid provided to show your workings): Gain on Sales of business Net Capital Gain Yes/No? Calculation details (if any) $ $ $

Answer rating: 100% (QA)

a Does the 50 CGT discount apply No the 50 CGT discount does not apply in this case because the asse... View the full answer