You work in the capital gains tax section of the tax division of
an accounting firm. You had a meeting with your client, Brad
Ferguson on 4 July 2021, who provided you with the following
information. Brad Ferguson sold his gift shop and family home in
New South Wales and moved to Queensland on 21 June 2021.Brad had
originally acquired the shop on 10 October 1992 for $450,000. ? He
sold the shop on 20 May 2021 for a net consideration of $840,000 of
this sum $120,000 was attributed to goodwill. ? Brad received a
further $70,000 for signing a contract not to open another business
within 10 km radius for the next five years. ? Brad sold his
principal place of residence in NSW. He had acquired the house for
950,000 on 19 July 1998. The house sold on 10 June 2021 for
$1,500,000. Estate agents and solicitors costs associated with the
sale were $31,000. Prepare a letter of advice explaining to Brad of
the tax consequences regarding the abovementioned transactions.
Your letter should include calculations of Brad’s estimated capital
gain.
an accounting firm. You had a meeting with your client, Brad
Ferguson on 4 July 2021, who provided you with the following
information. Brad Ferguson sold his gift shop and family home in
New South Wales and moved to Queensland on 21 June 2021.Brad had
originally acquired the shop on 10 October 1992 for $450,000. ? He
sold the shop on 20 May 2021 for a net consideration of $840,000 of
this sum $120,000 was attributed to goodwill. ? Brad received a
further $70,000 for signing a contract not to open another business
within 10 km radius for the next five years. ? Brad sold his
principal place of residence in NSW. He had acquired the house for
950,000 on 19 July 1998. The house sold on 10 June 2021 for
$1,500,000. Estate agents and solicitors costs associated with the
sale were $31,000. Prepare a letter of advice explaining to Brad of
the tax consequences regarding the abovementioned transactions.
Your letter should include calculations of Brad’s estimated capital
gain.
