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Capital Taxation Provisions - Taxation Law Assignment

   

Added on  2020-03-23

9 Pages2029 Words30 Views
Taxation
Capital Taxation Provisions - Taxation Law Assignment_1
TABLE OF CONTENTSAnswer 1....................................................................................................................................3Answer 2....................................................................................................................................4Answer 3....................................................................................................................................5Answer 4....................................................................................................................................6Answer 5....................................................................................................................................7REFERENCES...........................................................................................................................9
Capital Taxation Provisions - Taxation Law Assignment_2
ANSWER 1Case issue The case scenario reveals the issue faced by Eric who is engaged in purchasing and selling ofvarious capital assets. Now, he wants to calculate tax based on transactions related topurchase and sales. Provisions for taxation The guidelines of capital taxation provisions in Australia, there are two different methods areapplied on the basis of holding period of assets. Following points describe the conditions ofapplicability of taxations method: 1)Discounting and indexation method: These two methods of taxation are applicablein case assessee hold the capital for the tenure of 12 months and more.2)Other method: Other methods are applied when assessing hold capital assets for thetenure of fewer than 12 months (Basu, 2007).Applicability and decision For the calculation of tax in the here-cited case, other methods are going to be applied inwhich assets are purchased and sold within last 12 month. However, it is related to hold theasset for the tenure of less than 12 months.Table 1 Capital Gain TaxAssetPurchase costSales priceCalculationSales-purchasecost Net AmountCapital gainAntique Vase2,000.003,000.003,000.00-2,000.001,000.00Shares5,000.0020,000.0020,000.00-5,000.0015,000.0016,000.00Capital LossAntique chair3,000.001,000.001,000.00-3,000.00-2,000.00Painting9,000.001,000.001,000.00-9,000.00-8,000.00Sound system12,000.0011,000.0011,000.00--1,000.00
Capital Taxation Provisions - Taxation Law Assignment_3

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