Prepared by Natasha BTF5965 S2 2019 @ Simon Edu

Question 26
All items are disposals – CGT event A1, s 104-10. All assets are CGT assets, s 108-5.

Asset Capital proceeds Cost base Capital gain/loss Notes

s 116-20 s 110-25 s 104-10
Qantas shares 7,000 5,000 2,000 General
discount applies,
s 115-100
Telstra shares 4,000 10,000 (6,000)
Ford motorcar Disregarded, s
118-5
Painting 28,000 8,000 20,000 Collectables

1st element: General

6,000, s 110- discount applies,
25(2) s 115-100
market value
substitution rule,
s 116-30

2nd element:
2,000, s 110-35
Boat 10,000 11,000 (1,000) Capital losses
disregarded from personal
use assets are
disregarded
(cannot offset
against gain)
s108-20(1)
Total current year capital gain = 2,000 – 6,000 + 20,000 = 16,000
Apply capital loss carried forward from previous year 16,000 – 2,000 = 14,000
Apply general discount 14,000 * 50% = 7,000
Therefore, Marissa’s net capital gain for the 2019/20 income year is $7,000.

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Prepared by Natasha BTF5965 S2 2019 @ Simon Edu

Question 27
All items are disposals – CGT event A1, s 104-10. All assets are CGT assets, s 108-5.

Asset Capital proceeds Cost base Capital gain/loss Notes

s 116-20 s 110-25 s 104-10
Land 520,000 320,000 200,000 CGT event
happened on
1st element: 03/07/19
300,000 (contract date), s
s 110-25(2) 104-10(3)

3rd element: General

20,000 discount applies,
s 110-25 (4) s 115-100
Antique dressing 6,000 3,000 N/A Exception from
table CGT asset for
assets acquired
before 20
September 1985
s 100-25
Violin 15,000 17,000 (2,000) Capital losses
disregarded from personal
use assets are
disregarded
(cannot offset
against gain)
s108-20(1)
Shares 25,000 12,000 13,000 Held for less
than 12 months.
1st element: General
10,000, s 110- discount does
25(2) not apply

2nd element:
2,000, s 110-35

Apply general discount to land: 200,000 * 50% = 100,000

Apply capital loss carried forward from previous year to shares 13,000 – 7,000 = 6,000
Total current year net capital gain = 100,000 + 6,000 = 106,000

Quarantining rule: capital losses from collectibles can only be used to reduce capital gains from
collectibles s108-10(1), so $1,500 loss on sale of a sculpture cannot be applied.

Therefore, the client’s net capital gain for the 2019/20 income year is $106,000.