Case Study Capital Gains Tax

Question: Case Study: Capital Gains Tax. Answer: On the date of 5th June from the present year, he also sold the share he purchased from the mining company for $ 80,000. On that present year dated 10th January he purchased those shares for the amount of $75,000. In order to purchase he borrowed as loan amount $ 70,000 further also paid interest $5, 000 for the loan. He rather paid $750 as the brokerage in order of sales of shares and also paid the stamp duty $250 for the shares. According to the law of income tax, interest based on a loan is never granted as the part of an acquisition cost. Thus, the loan of interest is never included (Kay 2012). Capital gains are there are the basic difference between the capital and cost of capital tax gain asset acquisition. Three methods of calculating capital gain in accordance to this discount, method is the first and the principal methods which are applicable in the event of gained tax at least before 12 months. The next method is the second method which is explained as the method of indexation and is applicable when there is before that of 21st of September and is applied till at least for 12 months just before the relevant gain on capital tax. The final most method is residual method, and can be applicable when it not exceeds 12 months to held the asset. So it can be stated that these methods are used in computing overall calculation of capital gain (Fischer and Gallmeyer 2014). The properties which are taken before September 20th 1985 are: Sale of residential house or the family house; Any vehicles or motor vehicles; Any acquired property which can collect less than of $500; Any certain amount which can be reimbursed from certain injury (Keohane and Olmstead 2016). Capital losses based on the long term- It is based on long term may set against the term of only capital gain. There is no scope of another possible set off. Further be forwarded to an assessment of indefinite subsequent years and it is only used set off against capital loss of Long Term (Ball 2014). Capital loss based on the short term- It can be regarded as a set off the same sources or rather than from the capital gain of long term. Regarding this, there is a term it which is brought forward as the assessment year subsequently indefinite and the set off is against both long as well as for profit of short term(Rauch and Rijsdijk 2013). We can state that Mr Dave stayed for 30 years in a two-storey flat and that which he bought for $70,000. On June 27 of the present tax year, he sold that building for $ 8, 50,000. There was an auction made on the building and for which the purchaser gave $85,000 as an advance before the purchase. But later it was found that there was no proper fund present with the purchaser to purchase that property. As it can be seen there was a forfeited done with the money and $ 85,000 which was received was charged as income from different sources (Krugman 2014). Capital gain calculation can be The total sale that was proceed was of $8, 65, 000; But there was an exemption which was defined under CST and that includes only home for family (Oulton and Sebasti-Barriel 2013). On 20th September 1985 there was also a purchasing of a pro hart for the price of $ 15,000 and was sold at for the amount of $1, 25, 000. By that Capital Gain can be stated in the follow ways: Sale was proceeded for $ 1, 25,000 Less: Content of cost acquisition 15,000*123.4/71.3 $25,961 There was also purchase of a cruiser in the year of 2004 the amount of which was $1, 10, 000 and later on June 1st of the present year it was sold to a boat broker on the amount of $60,000 (Harding 2013). Hence, the capital gain can be followed as: Proceeds in Sale $ 60,000 Less: Content of cost acquisited $ 1, 10,000. Reference List: Ball, L.M., 2014. Long-term damage from the Great Recession in OECD countries (No. w20185). National Bureau of Economic Research. Barry, V., 2014. Parsing Marriage Penalties: The Irrationality of Tax and Government Benefit Marriage Penalty Jurisprudence. U. Pa. J. Const. L., 17, p.1183. Ferrer, A., Casals, J. and Sotoca, S., 2014. Conditional coverage and its role in determining and assessing long-term capital requirements. Available at SSRN 2447673. Fischer, M. and Gallmeyer, M.F., 2014. Heuristic portfolio trading rules with capital gain taxes. Journal of Financial Economics (JFE), Forthcoming. Fishman, S., 2014. Working for Yourself: Law Taxes for Independent Contractors, Freelancers Consultants. Nolo. Goold, P.R., 2015. Is Copyright Infringement a Strict Liability Tort. Berkeley Tech. LJ, 30, p.305. Harding, M., 2013. Taxation of dividend, interest, and capital gain income. Katz, L., 2014. Long-term unemployment in the Great Recession. Members-only Library.