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The Determination of the Eligibility of the Capital Gains

   

Added on  2020-04-01

8 Pages2107 Words43 Views
Running Head: TAXATION LAW 1Taxation Law<Student ID><Student Name><University Name>

TAXATION LAW2ContentsAnswer 1 Calculating the net capital gain or loss for a year:.................................................................3Answer 2 Taxation on Loan..................................................................................................................4Answer 3 Jack and Jill...........................................................................................................................5Answer 4 IRC v Duke of Westminster..................................................................................................6Answer 5 case of Bill............................................................................................................................7

TAXATION LAW3Answer 1 Calculating the net capital gain or loss for a year:The case depicts that Eric has acquired certain assets and has possession of thoseassets for less than a year. The determination of the eligibility of the capital gains from sale ofassets could be validated only if the selling price of an asset is higher than the procurementcost of the asset. Furthermore, Eric is also liable to be exempt from indexation benefits owingto the possession of assets for a time less than a year (Beretta, 2017). The information illustrated below can be implemented for calculation of capitalprofits on sale of assets by Eric as follows.AssetCost Base of AssetsCapital Proceeds ofAssetsNet Capital Profit/(Net Capital Loss)Home Sound System12,00011000(1000) LossShares in listedcompany 5,0002000015000 ProfitPainting 9,0001000(8000) LossAntique Chair 3,0001000(2000) LossAntique Vase 2,00030001000 ProfitNetCapitalGain/Loss5000 ProfitCollectibles:The definition of collectibles suggests that they are intended for satisfying thepersonal efficacies of an individual or fulfilling the self-esteem needs of an individual.Collectibles which are purchased at costs lesser than or equal to $500 imply that the profitsobtained from their sale would be exempt from taxation. The collectibles that can beidentified in the case of Eric comprise of an antique vase, an antique chair and a paintingwhich were acquired at the procurement costs of $2000, $3000 and $9000 respectively(Blizkovsky, 2017).Personal assets:Personal assets are acquired by an individual for addressing personal objectives orfulfilling the purpose of recreation. The personal assets acquired by Eric in this case can beidentified as the shares of a publicly listed company at a procurement cost of $5000 and ahome sound system for the procurement cost of $12000 (Bolong, 2015).

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