Question : Bill acquired a rental property in Noosa under a contract of purchase on 14th October 1993 for $250,000. He borrowed $220,000 from Westpac...

Question : Bill acquired a rental property in Noosa under a contract of purchase on 14th October 1993 for $250,000. He borrowed $220,000 from Westpac to fund the acquisition of the property. The loan was for a period of 30 years. Bill also incurred the following acquisition costs on 12th November 1993 (being the date of settlement):  

▪ legal fees on acquisition of property 3,460

▪ stamp duty on acquisition of property 8,450

▪ stamp duty on borrowing money to purchase property 1,100

On 2 November 1993, when removing the carpets in the third bedroom, he became aware that the bedroom had badly damaged floorboards. He was not aware of this at the time of purchase. He spent $17,250 replacing the floorboards. Tenants moved into the property on 9 December 1993.  On 15 July 1994, Bill built an in-ground swimming pool costing $22,180. On 8 September 1994 he completely renovated the main bathroom at a cost of $25,400.

On 31 May 2018, Bill sold the Noosa property under a contract of sale for $825,000. Sales commission amounted to $22,800. 

Bill has incurred the following expenses in relation to the Noosa rental property for the year ended 30 June 2018:    

▪ interest expense on loan 14,340

▪ repairs to broken roof tiles 540 

▪ rates and land tax 3,720 

▪ repainting of house due to extensive sun damage 12,430

▪ council rates 650

Required:

Calculate Bill's capital gain or loss in respect of the sale of the Noosa property using the CGT discount method. Please refer to appropriate sections of ITAA97. Assume that Bill has no carry forward capital losses.