Capital Gain Tax Case Study

Case Study 1: Capital Gain Tax
(a) Computation of Capital Gain for Dave Solomon
Computation of Capital Gain for Dave Solomon for The Year Ended On 30 June Particulars Amount (in$) Total Amount (in $)
Exempt: Proceeds & Cost Base of Home Property - (claiming the main residence i.e. family home exemption as it is exempted under the definition of CGT)
Add: Proceeds of Painting in the current year 125,000.00
Less: Cost Base of Painting acquired in 1985 after indexation (15000*123.4/71.3) =25960.73 (25,960.73) 150,960.73
Add: Proceeds of Luxury Motor Cruiser in the current year 60,000.00
Less: Cost Base of Luxury Motor Cruiser acquired in 2004 (110,000.00) (50,000.00)
Add: Proceeds of Shares 80,000.00
Less: Cost Base (75,000.00)
Less: Interest

If assesse acquired it for more than $10,000, is disregarded for only capital losses.
 If it is acquired for $10,000 or less, it is disregarded for both capital gains and capital losses.
(b) (b) Functioning out Mr. Dave’s Net Capital Gain
Capital Gains Tax of each asset should be calculated by Net Capital Gain formula given below:
Net capital gain = Total capital profit for the current year
Less: Total capital losses (including any net capital losses from previous years)
1) Generally, CGT is not an isolated tax. The net capital profits forms part of assesse assessable income in the year the CGT event occurred and is to be paid as a part of assesses income tax assessment for the respective income year.
2) As assets are often long term assesse needs to keep records safely and securely relating to purchase, conservation and enhancements. This will help not only in finally working out the amount that is subject to Capital Gains Tax but also helps in recollecting the true base costs that has been spent.
3) Some records which are specifically needed to keep include:
 Interest paid/to be paid on related loans
 Grosses of

An employer’s fringe benefit taxable amount is based in the grossed-up taxable values of the fringe benefits that have been provided during the year in respect of their employees. There are 13 kind of fringe benefit, and different valuation rules for each of these. Certain benefits are exempt benefits and are therefore excluded from FBT. Although employees do not pay income tax on fringe benefits, reportable fringe benefits amounts are recorded on their PAYG summaries and are relevant for calculating their liability to the MLS and HELP repayments as well as for certain superannuation