MLC301 Principles of Income Tax Law - Assessment Questions

QUESTION 3. 6

What is the amount of capital proceeds for CGT in each of the following cases:
(a) $4000 owing on the sale of land, but the purchaser cannot be located even though the contract of sale has been executed.
(b) During the last winter a dam on your property flooded a neighbour’s paddock and the neighbour is suing you for $20 000 damages. To avoid this legal action you enter an agreement with the neighbour that he can
remove the timber from 2 ha of your land if he agrees not to proceed with the claim for damages. The agreement is signed and the neighbour cuts the timber.
(c) As part of a wedding gift to his daughter a father transferred ownership of shares valued at $10 000 into his daughter’s name.
(d) When selling his manufacturing business for $200 000 cash the taxpayer also reached an agreement that the purchaser would in addition take over the mortgage on the property of $50 000.