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(Solution) Assignment -Taxation Law

   

Added on  2021-05-27

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Page1Assignment-Taxation Law
(Solution) Assignment -Taxation Law_1

Page2Table of ContentsQuestion 1 (3 Marks)...................................................................................................................................2Requirement:...........................................................................................................................................3Discuss whether or not the three payments are income from personal exertion. Would your answer differ if she wrote the story for her own satisfaction and only decided to sell it later?........................3Question 2 (2 marks)...................................................................................................................................3Requirement:...........................................................................................................................................4Calculate the taxable value of the car fringe benefit using the statutory formula.................................4Question 3 (5 marks)...................................................................................................................................4Requirement:...........................................................................................................................................5Discuss the effect on the assessable income of the parent...................................................................5Question 4 (10 Marks).................................................................................................................................6Requirement:...........................................................................................................................................6a) Based on the information above, determine Scott’s net capital gain or net capital loss for the year ended 30 June of the current tax year..................................................................................................6b) How would your answer to (a) differ if Scott sold the property to his daughter for $200,000?.......7c) How would your answer to (a) differ if the owner of the property was a company instead of an individual?...........................................................................................................................................7References...................................................................................................................................................7Question 1 (3 Marks)Hilary is a well-known mountain climber. The Daily Terror newspaper offers her $10,000 for herlife story, if she will write it. Without the assistance of a ghostwriter, she writes a story andassigns all her right, title and interest in the copyright for $10,000 to the Daily Terror. The storyis published and she is paid. She has never written a story before. She also sells the manuscript tothe Mitchell Library for $5,000 and several photographs that she took while mountain climbingfor which she receives $2,000.
(Solution) Assignment -Taxation Law_2

Page3Requirement:Discuss whether or not the three payments are income from personal exertion. Would your answerdiffer if she wrote the story for her own satisfaction and only decided to sell it later?According to the provisions of the Australian Taxation Law, the following are the sources ofincome for a person residing in Australia;Income from employment such as salary, wages, allowances, bonus etc.Income from Government payments such as age pension, austudy, newstart, disabilitypension, youth allowance, career payments etc. Income from investments such as bank interestIncome from business and professionIncome from other sourcesIn the aforesaid case, the three income of Hillary will be considered as income from othersources. Hillary is a mountain climber in profession and she is not a writer in profession. Theincome of Hillary for the mountain climber profession will be taxable under the heading Incomefrom profession. However, the income she generated from writing of the life story is not a part ofher profession. The same thing is applicable for the sale of manuscript and photographs ofmountain climbing. These three incomes are not related to her profession but was the incomefrom other sources. Thus, it can be concluded that the three payments of income are income forher personal extertion. No, my answer will not differ if she wrote the story for her ownsatisfaction and only decided to sell it laterQuestion 2 (2 marks)Eric provides his employee with the use of a car for 183 days during the FBT year. During thisperiod the car travelled 16,000 km. Eric purchased the car last year for $50,000. The employeecontributed $1,000 towards the cost of running the car and has provided Eric with relevantdocumentation.
(Solution) Assignment -Taxation Law_3

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