Taxation Law

Running head: TAX
Taxation Law
Name of the Student
Name of the University
Author Note

1
TAX

2
TAX
Question 1
Part 1
To determine the Capital gains by selling the antique painting by Helen
The antique painting, which is a collectible and a capital gain asset under section 108-
10(2) of the Income Tax Assessment Act 1997 (ITAA97). A Capital Gain Asset (CGT) is
triggered on a CGT event occurs as per section 102.2 of the Income Tax Assessment Act
1997. It is a CGT of a CGT asset is sold on a CGT event A1 as per section 104-10(1). The
asset is acquired by the buyer when the tax payer becomes the owner of the goods as directed
by section 109-5(1).
The antique painting was bought by Helen’s father on 20 september 1985 which
makes it exempted from the CGT calculation as it was acquired before CGT was introduced.
However, if the painting was acquired after CGT was introduced, then it would have been
treated as a collectible and a CGT asset. The cost base of the Element One shall be the
acquired for $4000 as per section 110-25(2). However, as Helen acquired the painting
through her father as a gift or by inheritance, the cost base shall be changed as per the current
market value according to section 112-20. The sale price of $12000 shall be the capital
proceed according to section 116.20. The capital gain shall be the Capital proceeds minus the
cost base. If Helen holds the painting for more than a year, she will be eligible to earn a
discount of 50%.
Part 2
To determine Capital gains by selling the Historical structure by Helen
The historical structure, which is a collectible and a capital gain asset under section
108-10(2) of the Income Tax Assessment Act 1997 (ITAA97). A Capital Gain Asset (CGT)
is triggered on a CGT event occurs as per section 102.2 of the Income Tax Assessment Act