Posted: May 31st, 2016

A two-storey residence at St Lucia in which he has lived for the last 30 years. He paid $70,000 to purchase the property and received $850,000 on 27 June of the current tax year, after the real estate agent deducted commissions of $15,000.

Dave Solomon is 59 years of age and is planning for his retirement. Following a visit to his financial adviser in March of the current tax year, Dave wants to contribute funds to his personal superannuation fund before 30 June of the current tax year. He has decided to sell the majority of his assets to raise the $1,000,000. He then intends to rent a city apartment and withdraw tax-free amounts from his personal superannuation account once he turns 60 in August of the next year. Dave has provided you with the following details of the assets he has sold:
(a) A two-storey residence at St Lucia in which he has lived for the last 30 years. He paid
$70,000 to purchase the property and received $850,000 on 27 June of the current tax
year, after the real estate agent deducted commissions of $15,000. The residence was
originally sold at auction and the buyer placed an $85,000 deposit on the property.
Unfortunately, two weeks later the buyer indicated that he did not have sufficient
funds to proceed with the purchase, thereby forfeiting his deposit to Dave on 1 May of
the current tax year. The real estate agents then negotiated the sale of the residence to
another interested party.
(