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HI6028 Taxation Theory, Practice & Law Assignment

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Holmes Institute Sydney

   

HI6028 Taxation Theory, Practice & Law (HI6028)

   

Added on  2020-03-23

HI6028 Taxation Theory, Practice & Law Assignment

   

Holmes Institute Sydney

   

HI6028 Taxation Theory, Practice & Law (HI6028)

   Added on 2020-03-23

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1HI6028 Taxation Theory, Practice & Law<Student ID><Student Name><University Name>
HI6028 Taxation Theory, Practice & Law Assignment_1
2Contents1. Calculation of Eric’s net capital gain or net capital loss for the year:...................................32. Calculation of Brian’s taxable value of the fringe benefits for the 2016/17 FBT year:.........43. Allocation of loss on property for tax purposes.....................................................................54. Principle established inIRC v Duke of Westminster[1936] AC 1.......................................65. Logging company scenario....................................................................................................7References..................................................................................................................................8
HI6028 Taxation Theory, Practice & Law Assignment_2
31. Calculation of Eric’s net capital gain or net capital loss for the year:The capital gain or loss that is incurred by an individual needs to be clearly understood in anygiven scenario to ascertain his or her financial position. In the presented scenario, in the past1 year Eric has acquired a number of assets such as an antique vase, an antique chair, apainting, a home sound system, and shares in a listed company for different prices. And lastweek he has sold the same at specific rates. Based on the provided details in the question, theassets were with him for less than a year. As per theory, when a capital asset is sold, the difference between the cost price of the assetand the amount realized from the sale refers to capital gain or capital loss. The capital gain orcapital loss can be classified into long-term or short-term based on the time period for whichit was held by an individual. If an asset is held for more than 12 months or 1 year, the capitalgain or loss is said to be long-term in nature (Andreas & Markus, 2014). Whereas if the assetis held for one year or less than a year, the capital gain or loss can be termed as short-term innature. In the presented situation, Eric has been holding the assets since the past 12 months sohis net capital gain or net capital loss for the year would be short-term in nature (Barseghyan& Coate, 2016).Classification of Eric’s assets The assets that Eric had in the last year can be categorized into two types namely assets thatare intended for his personal use and collectibles. The assets that are intended for one’spersonal use are the ones that an individual purchases for his own satisfaction and happiness.Out of the assets that were previously acquired by Eric, the home sound system and theshares of the listed company belong to this asset category (Becker, 2015). Collectible can bedefined as the asset of limited quantity but whose value is significant. Mostly it includesantiques. The assets that Eric previously possessed and sold in the past week like antiquevase, antique chair, and painting can be categorized under collectibles. Thus in the given scenario, to arrive at the net capital gain or net capital loss of Eric, the saleproceeds have to be deducted from the capital value of the same.AssetsCost of AssetsCapital Proceeds of AssetsDifferenceNet Capital Gain/(Net Capital Loss)Antique Vase2,000 3,000 1,000 GainAntique ChairLoss
HI6028 Taxation Theory, Practice & Law Assignment_3

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