Explain capital gains tax implications of the transactions


Jenny, aged 46, lived in Melbourne all her life. She decided to travel to Sydney on 27 June 2013 to begin a new job as the Manager of the New Asia Accounting Company. In assisting her move to Sydney, Jenny sold some of her assets as follows:

a. Car. Jenny expects to use buses and trains in Sydney so she sold her Volvocar on 15April 2013 for $37,000. She bought the Volvo on 19December 2007 for $90,000.

b. Rental property. Jenny bought a rental property on 19January 1987 for $75,000. She incurred $1200 of legal expenses on the purchase. She has always rented out the property and sold it via a contract signed on 17 March, 2013. The sale price was $88,000 and the costs incurred in selling the property were the agents selling fees of $750 and legal fees of $500. Settlement on the property was completed on 16 April, 2013

c. Vacant block of land. Jenny signed an unconditional contract to sell a vacant block of land on 18 June 2013 for $65,000. The settlement took place on 21 July, 2013. Jenny received the land on the death of her Aunt Anna, who died on 10 March 1994. Aunt Anna had bought the land on 9 September 1992 for $40,000. Costs incurred by Jenny in selling the land were real estate agent fees of $475 and legal fees of $350.

d. Diamond ring. Jenny received a diamond ring from an admirer, Edward on 19 May, 1989 and sold it for $3,000 on 3 June 2013. Edmund bought the ring on 7 May, 1989 for $1500. (Assume that the market value was the same on 7th and 19th May, 1989.

e. Home. Jenny sold her home unit for $175,000 on 10 January 2013. She bought it on 10 February, 1985 for $65,000. The costs incurred in selling her home was $3000.

f. Modern furniture. Jenny sold all her furniture on 22 June, 2013 for $16,000. Originally, she bought the furniture for $16,500 on 17 November, 1989.

Required:

Advise Jenny of the capital gains tax implications of the above transactions for the year ended 30 June 2013. Show ALL calculations including Jenny's net capital gain or loss, citing relevant sectionsof the ITAA, with explanations, in addition to citing relevant case law.

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Taxation: Explain capital gains tax implications of the transactions
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