uestion 1 ee Lin is an Australian resident individual She pu

uestion 1 ee Lin is an Australian resident individual. She purcnased a black f ats mais NSW as an investment on 3 March 2001 of $70,740 on the purchase and $2.300 in legal costs for $1 550,00D. She paid stanp dny Lee Lin sold the block in December 2015 for $3 ,600,000 incuing S legal costs and $108,000 for agent\'s commission Lee Lin incurred interest on the amount borrowed to purchase the proped $360,000 and council rates totalling $14,000. Required: a) Calculate the cost base for this asset. (4 marks) b) Calculate the capital gain or loss for the disposal of this asset (2 Mas c) Calculate Lee Lin\'s assessable income for the 201512016 year assuming she made a salary of $42,000, net rental income of $50,000 and a capita loss of $2,130 from the sale of some shares purchased in 2007 (marks

Solution

(A)/(B)Calculation of Capital Gain

Particulars

in $

Sale Consideration

36,00,00

0

Less:-

Legal cost

4,000

Agents commission

1,08,000

Net Sale Consideration (A)

34,88,00

0

Purchase Consideration

15,50,00

0

Add:-

Stamp duty

70,740

Legal Cost

2,300

Interest on Loan

3,60,000

Council Rates

14,000

Net Purchase Consideration (B)

19,97,04

0

Capital Gain (A-B)- [C]

14,90,96

0

Please note- Since cost inflation index is not given, we have not taken the same for calculation purpose. Also it is assumed that interest cost and council rates are incurred directly foe the purpose of property hence taken.

(C) Calculation of Assessable Income

Particulars

in $

Salary Income

42000

Rental Income

50000

Capital Gain (Refer Note 1)

14,88,83

0

Assessable Income

15,80,83

0

Note 1:-

Calculation of Capital Gain for Income purpose

Long term capital gain

14,90,96

0

Less:- Short term capital loss, set off against long term capital gain

2130

Net Capital gain for Income purpose

14,88,83

0

Particulars	in $
Sale Consideration	36,00,00 0
Less:-
Legal cost	4,000
Agents commission	1,08,000
Net Sale Consideration (A)	34,88,00 0
Purchase Consideration	15,50,00 0
Add:-
Stamp duty	70,740
Legal Cost	2,300
Interest on Loan	3,60,000
Council Rates	14,000
Net Purchase Consideration (B)	19,97,04 0
Capital Gain (A-B)- [C]	14,90,96 0