A couple buy a house for $800,000, live in it as their main residence the whole time, never rent it out, and sell it 18 months later for $900,000. What is their assessable capital gain?
Correct Answer
C) $0
A dwelling that was the owners' main residence for the whole ownership period, and was never used to produce income, is fully exempt under the main residence exemption in Division 118 of the Income Tax Assessment Act 1997. The $100,000 gain is disregarded, so nothing is assessable and the 50% discount never comes into play.
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