Select the correct CGT consequence, meaning will the event give rise to CGT even or not?...

Select the correct CGT consequence, meaning will the event give rise to CGT even or not? Alisha is a client of yours who sold some of her art collection by some artists. It consisted of the following artistic works:

A painting purchased in December 1995 for $55,000. She sold the painting on 10 December of the current tax year for $45,000. An antique purchased in June 1989 for $20,000. She sold it on 1 January of the current tax year for $25,000. A sculpture purchased in April 1983 for $17,000. She sold the sculpture on 1 July of the current tax year for $29,000. A stamp collection purchased in June 1977 for $300. She sold it on 10 December of current tax year for $3,000. An antique purchased in 15 September 1985 for $600. She sold it on 23 May of the current tax year for $25,000.

Expert Solution

Painting purchased in Dec 1995 for $55,000 and sold at $45,000 in same tax year, so no depreciation is charged. The transaction will not be charged CGT as there is no Capital Gain rather there is a Capital loss of amount $10,000.

An antique purchased in June for $20,000 and sold at $25,000 in the same tax year, so no depreciation is charged. As the item is bought at a lower price and sold at a higher price, so it will attract CGT as there is a capital gain of $5,000.

The sculpture purchased in April 1983 for $17,000 and she sold the sculpture on 1 July of the current tax year for $29,000. No depreciation is charged because the transaction is in the same tax year and there is a capital gain of $12,000 which will attract CGT.

Stamp collection purchased in June 1977 for $300 and she sold it on 10 December of the current tax year for $3,000. No depreciation is charged because the transaction is in the same tax year and there is a capital gain of $2,700 which will be charged for CGT.

The Antique purchased on 15 September 1985 for $600 and she sold it on 23 May of the current tax year for $25,000. No depreciation is charged because the transaction is in the same tax year and there is a capital gain of $24,400 which will be charged for CGT.

jeff jeffy answered 1 year ago

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