planned to build a block of units difficulty. On 1 July 2020 he subdivided the land into two blocks and on 2 June 2021 sold one block for $160,000 with settlement taking place on 5 July 2021. The market value of the remaining block $240,000. The associated costs were as follows: Stamp duty on purchase Legal fees on purchase Subdivision costs egal fees on sale ommission on sale 57,200 $1,400 $15,000 $1,600 $6,300 quired
planned to build a block of units difficulty. On 1 July 2020 he subdivided the land into two blocks and on 2 June 2021 sold one block for $160,000 with settlement taking place on 5 July 2021. The market value of the remaining block $240,000. The associated costs were as follows: Stamp duty on purchase Legal fees on purchase Subdivision costs egal fees on sale ommission on sale 57,200 $1,400 $15,000 $1,600 $6,300 quired
Chapter3: Income Sources
Section: Chapter Questions
Problem 43P
Related questions
Question
![May 2018, John purchased two hectares of land for $250,000 on which he planned to build a block of units but
unfortunately he ran into financial difficulty. On 1 July 2020 he subdivided the land into two blocks and on 2 June 2021 he
sold one block for $160,000 with settlement taking place on 5 July 2021. The market value of the remaining block was
$240,000. The associated costs were as follows:
Stamp duty on purchase
Legal fees on purchase
Subdivision costs
Legal fees on sale
Commission on sale
$7,200
$1,400
$15,000
$1,600
$6,300
Required
With reference to relevant legal authority, calculate any capital gain or loss on sale of the block to John in the year ended 30
June 2021?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd5622647-05a5-4f42-be10-13cdba0774a4%2Fd03929b0-9c74-48f2-b59a-ced24b9256b0%2Fu36rg8m_processed.png&w=3840&q=75)
Transcribed Image Text:May 2018, John purchased two hectares of land for $250,000 on which he planned to build a block of units but
unfortunately he ran into financial difficulty. On 1 July 2020 he subdivided the land into two blocks and on 2 June 2021 he
sold one block for $160,000 with settlement taking place on 5 July 2021. The market value of the remaining block was
$240,000. The associated costs were as follows:
Stamp duty on purchase
Legal fees on purchase
Subdivision costs
Legal fees on sale
Commission on sale
$7,200
$1,400
$15,000
$1,600
$6,300
Required
With reference to relevant legal authority, calculate any capital gain or loss on sale of the block to John in the year ended 30
June 2021?
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