Charles Harley seeks your advice for the 2015/16 income year with respect to the

Question

Charles Harley seeks your advice for the 2015/16 income year with respect to the income tax implications of his transactions as given below:

Transaction Purchase Cost $ Date of Purchase Date of Sale Consideration $

Shares in Rio Tinto 6,000 20 Sept 84 11 July 15 19,500

Investment Property 110,000 1 April 03 31 Dec 15 320,000

Family residence 195,200 3 June 94 12 Aug 15 650,200

Shares in Telstra 6,300 17 Nov 96 17 Nov 15 5,050

A very Old Painting 13,100 3 March 91 13 April 16 14,350

Stereo System 7,000 8 May 97 16 June 16 3,000

Jewellery 7,850 23 April 82 22 April 16 6,300

Antique clock 13,250 30 May 95 9 May 16 18,250

Piano 23,100 12 June 99 12 June 16 24,300

Capital loss of $550 on Collectables was carried forward from previous years.

Assessment task - Specify any losses that Charles can carry forward to future years.

Explanation / Answer

Before solving the questions, we will take certain assumptions:
1. All the mentioned assets are capital assets and no asset is a personal asset of Charles Harley
2. No depreciation is to be provided on these capital assets, as no depreciation rate or reference has been made in the question.

Now, we will solve the problem

Difference in Sales Consideration and Purchase Cost shall be the Loss/Profit of Charles for the 2015/16 income year
Therefore, Profit on the above = 1036650-358700 = 677,950
Also, Charles has a Capital Loss of $ 550 which was carried forward from previos years
Therefore, taxable income of Charles would be = 677950 - 550 = $ 677,400
Also, there will be no Capital Loss to be carried forward to future years.

Items Purchase Cost Date of Purchase Date of Sale Sales Consideration shares in rio tinto 6,000.00 20/09/84 11/07/15 19,500.00 investment in property 1,10,000.00 01/04/03 31/12/15 3,20,000.00 family residence 1,95,200.00 03/06/94 12/08/15 6,50,200.00 shares in telstra 6,300.00 17/11/96 17/11/15 5,050.00 very old painting 13,100.00 03/03/91 13/04/16 14,350.00 stereo system 7,000.00 08/05/97 16/06/16 3,000.00 jewellary 7,850.00 23/04/82 22/04/16 6,300.00 antique clock 13,250.00 30/05/95 09/05/16 18,250.00 piano 23,100.00 12/06/99 12/06/16 24,300.00 TOTAL 3,58,700.00 10,36,650.00

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