1. In 2008, Barney purchased a holiday home near the beach for use by his family on weekends for $700,000. Barney was required to pay $40,000 stamp duty in respect of the transfer. He borrowed money from a bank to fund some of the purchase prices and paid $20,000 in interest on the loan. Last year, he also paid $33,000 to a builder to renovate the kitchen in the property. Required: What's the cost base of the property?
1. In 2008, Barney purchased a holiday home near the beach for use by his family on weekends for $700,000. Barney was required to pay $40,000 stamp duty in respect of the transfer. He borrowed money from a bank to fund some of the purchase prices and paid $20,000 in interest on the loan. Last year, he also paid $33,000 to a builder to renovate the kitchen in the property. Required: What's the cost base of the property?
Chapter16: Accounting Periods And Methods
Section: Chapter Questions
Problem 13DQ
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Transcribed Image Text:1. In 2008, Barney purchased a holiday home
near the beach for use by his family on
weekends for $700,000. Barney was required
to pay $40,000 stamp duty in respect of the
transfer. He borrowed money from a bank to
fund some of the purchase prices and paid
$20,000 in interest on the loan. Last year, he
also paid $33,000 to a builder to renovate the
kitchen in the property. Required: What's the
cost base of the property?
2. John acquired a CGT asset in June 1987 for
$500,000. He sold the asset in January 2016
for 300,000.
Required: What's the net capital gain/loss
using the indexation method and Discount
method.
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