On 1 July 1987 Charles acquired a leather sofa for $30,000. Charles borrowed $29,000 of the...

On 1 July 1987 Charles acquired a leather sofa for $30,000. Charles borrowed $29,000 of the money from Corp Bank. The loan was a fixed interest loan on which Charles paid interest of $19,000. Charles sold it in September 2018 for $61,000.

Required: Calculate the indexed cost base for Capital Gains Tax purposes.

Solutions

Expert Solution

Furniture/ sofa comes under the defination of personal asset and sale of personal assets are not liable for the capital gains except sale of jewellery as per defination of capital asset in income tax law.

Hence no capital gains shall arise. No taxability.

jeff jeffy answered 2 years ago

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