Question

Alice sells her residential investment property for $500,000 that she held for five years. She bought the property for $320,000 and claimed a building depreciation allowance of $12,000 each year. What is her assessable capital gain

Answer 1

Solution:

Purchase cost of property = Cost - accumulated depriciation

$=320000-(5\times 12000) \\=320000-60000 \\=260000$

Sale amount consideration = 500000

Then, assessable capital gain = $500000-260000=\$ 240,000$