The Principles of Taxation Law | Report

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID

1TAXATION LAW
Answer to question 1:
Issue:
The depicted issue is interrelated to net capital loss for the income year derived from
the personal use of asset is disregarded.
Laws:
i. “Section 108-20 of the ITAA 1997”
ii. “Section 108-10 of the ITAA 1997”
Applications
At the time of working out the net capital loss for the income year capital loss made
from the personal use of the asset is not regarded. In the current situation there is only a
capital loss that is been made by Eric from the home sound system that is disallowed from

2TAXATION LAW
being considered for offset against the capital gains of sale of shares. In accordance with
“section 108-10” loss of collectables are disregarded and not setoff are permitted (Kiprotich
2016). So Eric has only derived income from ordinary assets with no current year capital or
deductions will applied on Eric. During the current year the capital gains for Eric accounted
$15,000.
Conclusion:
The assessment defined that Eric will not be able to offset any loss of collectables
because has generated gains that were in the nature of ordinary assets.
Answer to question 2:
Issue:
The question is dealing with the issue of FBT that is defined under the Fringe Benefit
Act 1999.
Rule:
i. “Fringe Benefit Tax Assessment Act 1986”
Applications:
It is found from the study that Brian is released from the Bank from the payment of
interest on monthly instalment basis and he is only required to pay interest at the end of the
loan period. As defined under the “Taxation Ruling of 93/6 that banks sometimes provide
their customers with the facility of setting off interest that is incurred by the customers on the
amount of loan (Chan 2013). Taking in the account Taxation ruling of 93/6, Brian on making
the payment of loan interest at the end of the loan term rather than on instalment would not be