Question
Because of financial difficulties Simon was forced to dispose of the following asset:
He bought an investment property for $ in March He rented out the property for years and each year he made a rental loss of $ which he claimed as an allowable income tax deduction. He carried out an improvement on the property by adding an extra room at a cost of $ in October
He managed to sell it for $ and signed the contract on May The settlement date was August His selling costs were $
He also has a capital loss made in from the sale of his jet ski of $
He had purchased an antique manuscript which was the original diary of the famous composer Beethoven in for $ He sold this manuscript in June for $ He has carried forward collectable losses of $ from the tax year.
The CPI index numbers are September is March is
Required:
Assuming Simon wants to minimize his tax liability, calculate his net capital gain or capital loss for the year ending June using the most appropriate method. Show all calculations.
