Jeremy is 51 and had a successful sole trader business for 11 years producing music videos...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Jeremy is 51 and had a successful sole trader business for 11 years producing music videos and DVDs. He started the business himself in 2008. With rapid changes in technology and the move to digital streaming, he decided to get out of the business and look around for another small business to buy in the next year or two to tide him through to retirement age. Unfortunately, Jeremy's mum is very ill so he needs to spend more time with her. He is likely to inherit a substantial cash amount when she dies. In July 2019, he sold the whole business to Mike for $4m, comprising a music and film studio-building, some tangible depreciating assets, and a large stock of DVDs and master tapes. The land and building were bought in 2012 for $900,000. The values of the individual assets were as follows: Assets $ Land and studio building 2,200,000 Depreciating assets 500,000 Trading stock 300,000 Goodwill 1,000,000 At the time of sale, Jeremy owned a number of other assets with market values as follows: Main residence in Sydney - $2.5m Holiday home in Byron Bay, NSW - $1.5m Share portfolio - $300,000 Balance with Australian Super - $800,000 Jeremy's initial investments in the stock market some years ago weren't very successful so he has unutilised net capital losses of $100,000 carried forward. What is Jeremy's net capital gain for the 2019-20 income year? Explain your answer by showing all calculations, reasons for exclusions, and supporting legislative references where appropriate. Consider the application of the small business CGT concessions where appropriate. Ignore any Division 43 ITAA97 implications. Jeremy is 51 and had a successful sole trader business for 11 years producing music videos and DVDs. He started the business himself in 2008. With rapid changes in technology and the move to digital streaming, he decided to get out of the business and look around for another small business to buy in the next year or two to tide him through to retirement age. Unfortunately, Jeremy's mum is very ill so he needs to spend more time with her. He is likely to inherit a substantial cash amount when she dies. In July 2019, he sold the whole business to Mike for $4m, comprising a music and film studio-building, some tangible depreciating assets, and a large stock of DVDs and master tapes. The land and building were bought in 2012 for $900,000. The values of the individual assets were as follows: Assets $ Land and studio building 2,200,000 Depreciating assets 500,000 Trading stock 300,000 Goodwill 1,000,000 At the time of sale, Jeremy owned a number of other assets with market values as follows: Main residence in Sydney - $2.5m Holiday home in Byron Bay, NSW - $1.5m Share portfolio - $300,000 Balance with Australian Super - $800,000 Jeremy's initial investments in the stock market some years ago weren't very successful so he has unutilised net capital losses of $100,000 carried forward. What is Jeremy's net capital gain for the 2019-20 income year? Explain your answer by showing all calculations, reasons for exclusions, and supporting legislative references where appropriate. Consider the application of the small business CGT concessions where appropriate. Ignore any Division 43 ITAA97 implications.
Expert Answer:
Answer rating: 100% (QA)
Part 1 Part 2 CGT events A1 on sale of business and assets Trading stock disreg... View the full answer
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Business Horizons (BH) produces and markets DVDs for sale to the business community. It hires well-known business speakers to present new developments in their area of expertise in DVD format. The...
-
Jeremy and Alyssa Johnson have been married for five years and do not have any children. Jeremy was married previously and has one child from the prior marriage. He is self-employed and operates his...
-
Jeremy and Alyssa Johnson have been married for five years and do not have any children. Jeremy was married previously and has one child from the prior marriage. He is self-employed and operates his...
-
What are the different relays that employed for protection of apparatus and transmission lines?
-
Procter & Gamble Co., is an American multinational corporation that manufactures a wide range of consumer goods, such as laundry and homecare (Ariel, Mr Clean), feminine protection (Always),...
-
Refer to the \(2 \times 4\) lumber strength data in Exercise 2.58, page 48. According to the computer output, a sample of \(n=30\) specimens had \(\bar{x}=1908.8\) and \(s=\) 327.1. Find a \(95 \%\)...
-
A rectangular sharp-crested weir is used to measure the flowrate in a channel of width \(10 \mathrm{ft}\). It is desired to have the upstream channel flow depth be \(6 \mathrm{ft}\) when the flowrate...
-
The OLTP system data for the Fitchwood Insurance Company is in a series of flat files. What process do you envision would be needed in order to extract the data and create the ERD shown in Figure...
-
Explore the concept of the "six big losses" in TPM. How can advanced data analytics and process automation aid in identifying and mitigating these losses to improve Overall Equipment Effectiveness...
-
Cinder Inc. is a Canadian-controlled private corporation based in your province. The company operates a wholesale business. The following information is provided for its year ended May 31, 2020: 1....
-
A small mass attached to a string rotates on frictionless table top as shown. If the tension in the string is increased by pulling the string causing the radius of the circular motion to decrease by...
-
How do intricate molecular signaling pathways orchestrate the formation and refinement of neural circuits in the complex milieu of advanced neurobiological systems?
-
Review networking in embedded systems and list the key features. What are the common types of networking used in embedded systems? What protocol does the ethernet follow? What are the advantages of...
-
During 2023, Enrique had the following transactions: Salary $70,000 Interest income on Xerox bonds 3,000 Inheritance from uncle 40,000 Contribution to traditional IRA 6,500 Capital losses 2,500...
-
Bella, Inc. manufactures two kinds of bags-totes and satchels. The company allocates manufacturing overhead using a single plantwide rate with direct labor cost as the allocation base. Estimated...
-
Discuss the importance of embedded systems in the industry. Discuss one application enabled with embedded systems.
-
James, who is in the 35 percent marginal tax bracket with a 15 percent tax rate on dividends, owns 100 percent of the stock of JJ Inc. This year, JJ generates $562,000 taxable income and pays a...
-
The comparative statements of financial position of Menachem NV at the beginning and end of the year 2019 appear below. Net income of ¬34,000 was reported, and dividends of ¬23,000 were paid...
-
Hillshire Brands owns the following brands: Ball Park franks, Sara Lee bakery goods, Hillshire Farm, Jimmy Dean, Kiwi shoe care products, and many other products. The following information relates to...
-
On January 2, 2013, Weston Company acquired 20% of the 200,000 shares of outstanding common stock of Startile Corp. for $18 per share. The purchase price was equal to Startile's underlying book...
-
On April 1, 2005, Rowe Tool Company authorized the sale of $5,000,000 of 6% convertible bonds with interest payment dates of April 1 and October 1. The bonds were sold on July 1, 2005, and mature on...
-
Using the transformation \(w=\sin (z)\), determine the equation for the stream function for flow inside the semi-infinite region \(y \geq 0,-\pi / 2 \leq x \leq \pi / 2\) shown in Figure P9.17. -/2...
-
The method of images uses precisely oriented collections of sources, sinks, and vortices to establish artificial walls and so simulate more complicated flow fields. One such flow field is formed by...
-
A stream function is given by: \[\psi=\sin \left(\frac{x}{L} ight) \sinh \left(\frac{y}{K} ight)\] where \(L\) and \(K\) are constants, \(0 \leq x \leq \pi L\) and \(y \geq 0\). a. Does \(\psi\)...
Study smarter with the SolutionInn App