Taxation Law: Capital Gains on Main Residence Inherited from Deceased

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
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TAXATION LAW1
Table of Contents
Answer to question 2:...................................................................................................2
Introduction:..............................................................................................................2
Issues:.......................................................................................................................2
Rule:..........................................................................................................................2
Application:................................................................................................................4
Conclusion:...............................................................................................................7
References:..................................................................................................................8

TAXATION LAW2
Answer to question 2:
Introduction:
Issues:
1.1. Whether the taxpayer will be considered liable to pay duty on capital gains
initiating out of CGT events from main residence inherited from the deceased
within “sec 118-195, ITAA 1997”?
1.2. Whether the property formed the post-CGT asset of demised taxpayer?
1.3. Was the possessions treated as the central home of residence of the
departed taxpayer before his death?
1.4. Was the property assimilated by taxpayer as the estate of departed?
1.5. Was the taxpayer living in the possessions from the time of death to the date
of sale?
Rule:
Under the “section 118-110 (1), ITAA 1997” there are basic main residence
exemption that are applied on the taxpayer all through their entire time of tenure
(Woellner et al., 2016). Capital gains or loss that takes place to a home which forms
the main home of the taxpayer is simply ignored from tax provided that;
a. If the assesse is a person
b. The home formed the chief house of residence for the assesse all through the
entire period they owned
c. The house ownership was not given to the assesse as beneficiary of the
departed estate.
The taxpayer must denote that a full main dwelling exception would not be
permitted to the taxpayer if the apartment was the main house of residence for the
taxpayer all through their part of the possession period or it was put in to usage by
the assesse for creating assessable revenues (Barkoczy, 2016). Accordingly,
“Division 128, ITAA 1997” is mainly associated with the CGT concerns on the
event of demise. According to “sec 128-10” the death of the taxpayer cannot be
viewed as disposal of the asset by the late taxpayer. As a result, no CGT
consequences happens. “Sec 128-15” provides explanation that assets are
acquired by the beneficiary for the purpose of CGT on the date of the death.