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Taxation Law for Property Owners

   

Added on  2020-12-29

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Taxation Law
Taxation Law for Property Owners_1

TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1Question 1........................................................................................................................................1Explaining whether payments will be covered in personal exertion. Would solution bedifferent if story was written and sold by her later?...............................................................1Question 2........................................................................................................................................1Computation of car fringe benefit tax using statutory formula..............................................1Question 3........................................................................................................................................2Explain effect on assessable income of the parent.................................................................2Question 4........................................................................................................................................2A) Calculation of net capital gain or net capital loss..............................................................2B) Property sold to daughter ..................................................................................................3C) Property owner is corporation and not individual person.................................................3CONCLUSION................................................................................................................................3REFERENCES................................................................................................................................4
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INTRODUCTIONThe taxation law of Australia levies proper tax obligation on the income attained throughany source. Present report deals with computation of tax on various scenarios and application ofITAA Act 1997 is provided for easing off tax liability. Car fringe benefits calculation is alsodone with respect to statutory formula governed by ATO. Question 1Explaining whether payments will be covered in personal exertion. Would solution be different ifstory was written and sold by her later?The Section 393-10 of ITAA Act 1997 can be applied relating to income garnered byway of commission, salaries and bonus. Furthermore, income attained through pensions, subsidyreceived, fees are covered under the head of personal exertion. Sale of property andaccomplishing income is also treated in this context. One of the main reason for classifyingunder such head is that payments are attained in lieu of tax payers as they have provided timeand contributed in imparting services to company (Pearson, 2017). By taking into account case study of Hilary, provisions of Act applies effectively. It canbe interpreted that three payments are received. First is copyright payment amounting to 10000which is classified as income under personal exertion. Other two payments such as payment ofmanuscript to Mitchell Library of 5000 and photographs of mountain climbing of 2000. Inrelation to this, case of rent V FCT (1971) 125 CLR 418 may be cited in which taxpayer soldcopyright of story of her spouse and Court has proven, capital gain was not attained. Instead,assessable income had been made because time was devoted. Thus, it applies to case of Hilary aswell. These payments are made in accordance to hard work and dedication performed by Hilaryand thus, these are treated under personal exertion only. Moreover, the solution would be same ifstory is written by her and sold in the market (Wada, and et.al, 2017). Question 2Computation of car fringe benefit tax using statutory formulaThe taxable value in case of Eric related to car fringe benefit can be easily calculated.Base value = 50000, Employee contribution = 1000. Kilometres will not be taken under statutoryformula. Car was available for 183 days and from this, number of days car was unavailable canbe computed by 365 – 183 = 182. Hence, by using formula, gross value = 5013.69 and from this,1
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