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Simpson loves restoring old boats as a hobby. On 1 July 2015,...

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Simpson loves restoring old boats as a hobby. On 1 July 2015,...

Simpson loves restoring old boats as a hobby. On 1 July 2015, Simpson bought an old boat in very run-down condition for $8,000. On 30 June 2020, Simpson sold the boat for $55,000.

Which of the following statements is TRUE?

As the nature of the activity is more in line with a business operation rather than a hobby, the gain on sale will be treated as ordinary assessable income

The capital gain will be ignored as the boat is a collectable.

Simpson will incur capital gains tax (CGT) on the capital gain arising from the sale of the boat.

None of these

The capital gain will be ignored as the boat is a personal use asset purchased for less than $10,000.

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Answered by Lennah on coursehero.com

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