A is a carpenter who purchased a vacant block of land in Sydney on 1 October 1980. On 1
September 1986, A built a house on the land. At the time, the land was valued at $110,000 and
the cost of construction was $100,000. Immediately, after the construction finished, the property
has been rented out. On 1 March 2019, A sold the property at auction for $1,400,000.
With reference to relevant legislation/case law, determine:
a) A’s net capital gain or net capital loss for the year ended 30 June 2019 using both Discount
method and Indexation method.
b) How would your answer to a) differ if the owner of the property was a company instead of A?
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