Capital Gains Tax Liability Case Study Example | Topics and Well Written Essays - 1500 words

Capital Gains Tax Liability - Case Study patternThis is not only valuable because you singularly own the property, but also because that gives you added equity and financial credibleness in addition to other benefits, such as the fact that being a homeowner brings with it some perks.The capital gains that will be have to stipendiary on the apartment is $150,000 since that is the money that was made off-key the sale. This number is computed by subtracting the original list price ($650,000) from the sale price ($800,000). Additionally, capital gains tax must(prenominal) be paid on the house. The main residence exemption whitethorn apply, but you as the lymph gland would have to ask a capital gains lawyer if this would apply to you. You were supposed to have given both years notice within having a combination of residencies.1Since Angelina owned 10,000 sh ars in Rio Tinto, and they are now valued at $40 and not the original selling price of $29, she will have to pay capital gain s taxes for decline value. Her capital gains tax will be a certain percentage of $11,000 that she made after the BHP take everyplace of Rio Tinto. Rollover consequences may be that Angelina will have to pay some sort of fine for rolling over her additions.For Angelinas partnership with Lena, she will have to pay a certain percentage of capital gains taxes of $75,000. ... However, while the roll over allows you to defer a capital gain to a later income year, other CGT small business concessions may exempt or reduce your capital gain which are the consequences.2 The law states, If your business has owned an asset for 15years and you are aged 55years or over and are retiring, or if you are permanently incapacitated, you wont have an taxable capital gain when you sell the asset.3 therefore, since Angelina is only 52 she squirtnot get this break.However, the law also states, A capital gain from the sale of a business asset will be exempt up to a lifetime limit of $500,000. If you a re under 55years of age, the exempt amount must be paid into a complying superannuation fund or a retirement savings account to obtain the exemption.4 This would apply to Angelina, so she could put any capital gains tax into the specified type of retirement account.Angelina well-nigh likely is able to receive the 50% small business reduction. This means that she can multiply one-half of her profit, and subtract it from the capital gain and only have to pay that amount. Angelina and Sean would have to meet certain requirements in order to get a small business exemption. Some further research would have to be done in order to see if they met those requirements. According to Active Asset Reduction law, There are other CGT small business concessions, in addition to this concession, that may apply to reduce your capital gain. You can apply as many concessions as you are entitled to until the capital gain is reduced to nil. There are rules about the order you apply the CGTconcessions.... 5With regard to Angelina and Lenas business, most likely the trading wrinkle could be rolled over since it is such