Problem
William is a self-employed builder living in Wellington. On 1 January 2022, William inherited a generous sum of money from his grandmother. Some of this money was used to purchase real estate. The following activities were undertaken:
• On 1 February 2022, William purchased a house in Kelburn to live in. The property cost $2,500,000. He lived in the house for 5 months and then rented it out when the adjoining neighbours commenced development of their section, as he found the construction noise unbearable. The tenants stayed for 1 year. William sold the house on 1 July 2023 for $2,700,000.
• On 1 March 2022, William purchased a city apartment for his brother, Harry, to live in while he was studying at university in Wellington. The apartment cost $950,000 and William spent around $150,000 on a new bathroom and kitchen for the apartment. William undertook most of the labouring work himself, which he valued at $40,000. At the end of 2022, Harry decided not to continue with his university studies and moved to Las Vegas. The apartment is sold for $1,000,000 in January 2023.
Task
Explain whether or not the proceeds of each sale of land are likely to constitute income to William in terms of any of sections CB 6-CB 23 of the (New Zealand ) Income Tax Act 2007 and, if so, how much is assessable income.