Chan inherited a Caravan from his deceased relative. The Caravan was purchased in 2005 for $25,000
and used mainly for private purpose. The market value of the death was $7,000.
Chan wants to sell the caravan, please advise him about the CGT consequences.
The caravan acquired by Chan is a post-CGT asset and is acquired at the cost base at date of death
equals to $25,000. A capital gain on a personal use asset is exempt if it is acquired for $10,000 or less.
Chan disposed of the caravan for $7,000 and incurred a capital loss of $18,000. Because the capital
losses on the disposal of personal use assets are disregarded.
The disposal of the caravan does not give rise to any capital gain or loss.