Missing Home Case Study Essay

Question 2:
Winnie, a resident of Australia, decided to sell her business of horse breeding located in the Melbourne's south-eastern suburbs in 2015. However, the buyer did not want to purchase the land. Bought for $1m in 2005, the real estate is 10 hectares in size. At first, he opted for auctioning the entire real estate, but that attempt failed to raise her reserve price of $10m, so she passed it in. Although the reserve was a fair market value, her real estate agent felt that buyers would not be impressed in buying the entire land. Winnie sought advice from various accountants and agents who recommended that most home buyers would find smaller blocks more affordable. For example, 10 vacant one-hectare blocks would only require minimal subdivision costs, and sell for $2

In addition to that, Winnie was also advised that 50 townhouses could be built at the cost of $100,000 each and they could sell for $1m each. Seemingly, she took the latter advice and installed office cabins on the site and personally managed the entire construction, sales, and marketing activities in July 2016. 50 townhouses on an equal size and value blocks were constructed, and after one year (June 30, 2017) half of these (25) had been sold for a total of $25m. Following the description above, I will provide Winnie with a detailed advice of the possible income tax consequences of the $25m real estate sales in 2017. Other factors related to the advice will include a review of the alternative views based on the facts, using quality legal references. The paper will also cover the assessable income resulting from each alternative view, and my opinion on which I think is the better or