Individual Assignment On Taxation Law

Added on - 01 Apr 2020

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Taxation AssignmentT 2 2017 Individual AssignmentStudent Name:Student ID:Subject Name: Taxation Theory, Practice & Law Subject ID: HI6028Date Due :Professor Name:1|P a g e
Table of Contents1.0 QUESTION 1...........................................................................................................32.0 Question 2................................................................................................................43.0 Question 3................................................................................................................54.0 Question 4................................................................................................................75.0 Question 5................................................................................................................8Reference List..............................................................................................................10
1.0 QUESTION 1Over the last 12 months, Eric acquired the following assets: an antique vase (for$2,000), an antique chair (for $3,000), a painting (for $9,000), a home sound system(for $12,000), and shares in a listed company (for $5,000). Last week he sold theseassets as follows: antique vase (for $3,000), antique chair (for $1,000), painting (for$1,000), sound system (for $11,000) and shares (for $20,000). Calculate his netcapital gain or net capital loss for the year.Answer:Issue: Sale of assets are defined under section 108-20 of the ITAA 1997, thisparticular issue is connected with determining of capital gains or losses derived fromthem.Laws:i.“Section 108-20 of the ITAA 1997”ii.“Section 108-10 of ITAA 1997”
Applications:No losses are incorporated on basis of disposal of personal use for theassets, as “section 108-20 of the ITAA 1997”, loss of $1,000, which is incurred forsale of home sound system cannot be set off(Kenny 2013).. Any form of collectedlosses from sales of shares as per Section 108-10 of the ITAA 1997 cannot be set offagainst common gains. As per Section 108-10 of ITAA 1997, offset can be consideredalso. There is no current year ordinary capital or any kind of applicable reductions,Eric gained profit from disposal of ordinary assets. The capital gain for Eric currentlystands at $15,000.Conclusion:Eric cannot offset losses from collectibles, as he has only gained profitfrom such disposal of ordinary assets.2.0 Question 2Brian is a bank executive. As part of his remuneration package, his employerprovided him with a three-year loan of $1m at a special interest rate of 1% pa(payable in monthly instalments). The loan was provided on 1 April 2016. Brian used
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