TAXATION TAXATION 8 8 Taxation Name of the Student Name of the University Author Note Earnings from Koles

Running head: TAXATION
Taxation
Name of the Student
Name of the University
Author Note

TAXATION1
1. Earnings from Koles:
Issue
The tax implications of the given transactions.
Reason
ITAA 97, s 6.5: all receipts received that can be treated as an income through the
ordinary concepts is required to be treated as ordinary income.
PAYG is required to be deducted from net tax.
ITAA 97, s 15.2: allowance to employee is to be treated as statutory income.
Impact on income
$80000 – to be treated as ordinary income as per ITAA 97, s 6.5.
$24000 – needs to be deducted from net tax.
$10000 – statutory income as per ITAA 97, s 15.2.
$(5000 + 5000) = $ 10000 - statutory income as per ITAA 97, s 15.2.
$1000 – it cannot be treated as a gift. statutory income as per ITAA 97, s 15.2.
$1000 – not to be included in assessable income as it has not been received in the
furtherance of employment.
2. Further Benefits from Koles
Issue
The tax implications of the given transactions.

TAXATION2
Reason
Eisner v Macomber (1920) 252 US 189: lump sum receipt is required to be treated as a
capital gain as it does not comply with the flow concept.
ITAA 97, s 15.2: allowance to employee is to be treated as statutory income.
Impact in income
$10000 – lump sum capital receipt.
$3000 - statutory income as per ITAA 97, s 15.2.
$1500 – Flyer points not assessable income.
3. Investment Earnings
Issue
The tax implications of the given transactions.
Reason
ITAA 97, s 6.5: all receipts received that can be treated as an income through the
ordinary concepts is required to be treated as ordinary income.
ITAA 97, s 44: dividends are to be treated as statutory income.
Franking credit needs to be deducted from net tax.
Impact
$500 - to be treated as ordinary income as per ITAA 97, s 6.5.
$14000 – as statutory as per ITAA 97, s 44.

TAXATION3
Franking credit – 1400*70/30 = $3267
4. Marriage Celebrant Fees
Issue
The tax implications of the given transactions.
Reason
ITAA 36, s 6.1: income that has been accrued from the application of personal exertion is
required to be treated as ordinary income.
Impact
$600 – needs to be treated as ordinary income as per ITAA 36, s 6.1.
5. Bingo Winnings and TAB Account
Issue
The tax implications of the given transactions.
Reason
ITAA 97, s 6.5: all receipts received that can be treated as an income through the
ordinary concepts is required to be treated as ordinary income.
Federal Coke Co Pty Ltd v FC of T 77 ATC 4255: income from windfall games are not to
be treated as assessable income, if it has not been carried out in business-like manner.
Taxation Ruling 97/11: income received form business is required to be treated as
ordinary income to be included under ITAA 97, s 6.5.