In September 2016, Jack sold 200 shares @ €20 per share. Jack originally bought 200 shares in 1972 for €4 each and the shares had a market value at 6 April 1974 of €5 each. There was a rights issue of 1 for 2 in February 1999 at €10 each.
accounting
Description
QUESTION
Jack and his wife Jill are both Irish resident and domiciled. Jack entered into the following transactions during 2016: 1) In February 2016, Jack disposed of ten acres of land to his brother for €240,000. The market value of the ten acres of land at the date of disposal was €300,000. The land disposed of was part of a larger lot of land purchased by Jack in May 2001. The lot originally purchased comprised 20 acres of land and Jack paid €400,000 for the land and a further €32,000 in stamp duty and legal fees. Between March and August of 2007, Jack carried out extensive drainage and flood defence work on the land at a cost of €80,000. In 2011 Jack sold ten acres of the land to a neighbour for €360,000. At that date the market value of the remaining ten acres of land was €280,000. The land was zoned as agricultural.
2) In April 2016, Jack gifted a separate site of half an acre to his son, Andrew. The market value of the half acre site at the date of the gift was €76,000. The site had been purchased by Jack in May 1999 for €40,000, and stamp duty and solicitors’ fees paid were €4,000. The site was gifted to Andrew so that he could build a home. He currently lives at home with his parents (pending the construction of a house on the gifted land) and does not own any residential property.
3) Jack bought a greyhound with four friends in June 2013. Each of the four friends paid €2,000 towards the cost of the dog. The dog has been very successful on the track over the past year. Jack and his friends decided to take advantage of the dog’s recent success and sold the dog in June 2016 for €20,000.
4) In July 2016, Jack gifted an antique ring, valued at €13,000, to his daughter, Sandy, on the occasion of her 18th birthday. The market value of the ring at 6 April 1974 was €4,000. Jack had been left the ring in his mother’s will when she died in August 2001. The market value of the ring at that date was €12,000.
5) In September 2016, Jack sold 200 shares @ €20 per share. Jack originally bought 200 shares
in 1972 for €4 each and the shares had a market value at 6 April 1974 of €5 each. There was
a rights issue of 1 for 2 in February 1999 at €10 each.
