Problem
In 2005 your client purchased a holiday home unit in Melbourne for $450,000. The cost associated with purchasing the unit were legal fees of $1,400 and stamp duty of $3,800 During the period of ownership, the unit was used solely for family holidays. The cost of keeping the unit, strata levies, rates, insurance etc amounted to a total of $27,000. On 25 December 2021 your client made a gift of the unit to her son for him to use as his family home. At the time of the gift the unit had a market value of $1,200,000. Your client had no other CGT events during the year. Your client had $50,000 of CGT losses from disposing of shares carried forward from a previous income year.
Calculate the capital gain on the disposal of the unit. Advise your client how this will be treated in her tax return if your client is a resident individual with a salary of $247,000 and $2.000 in work related expenses.