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Taxation Assignment Answers

Added on - 26 Nov 2019

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Taxation assignment
ContentsAnswer 1.....................................................................................................................................................3Answer 2.....................................................................................................................................................4Answer 3.....................................................................................................................................................6Answer 4.....................................................................................................................................................7Answer 5.....................................................................................................................................................8
Answer 1In the given case, Eric has acquired certain assets in the last 12 months. The assets that has beenacquired by Eric in the last 12 months has been sold by him during the same here. The assetsacquired by Eric include painting, antique chairs, antique vase, shares in the listed companiesand a home sound system.In the below working file, the capital gain and loss has been computed using the purchase priceand sales price of the assets:
As per the provision of Australian tax laws, an asset that has been acquired for a relatively longerperiod has been termed as a capital asset. Capital gain and loss has been calculated on sale ofCapital Asset. There are certain exceptions provided in the Australian tax laws in relation to thesale of capital asset which may lead to capital gain and loss for an individual or a company. AnyCapital Asset that has been acquired before 28 September 1985 is outside of the purview ofcapital gain tax in Australia. Thus, any capital Asset that has been acquired after 20 September1985 which is not within the exemption limit covered under the definition of capital gain tax inAustralia and thus eligible for capital gain tax. Further, any Capital Asset whose purchase valueis less than $10,000 is also kept outside the purview of capital gain tax.Considering the above provision in relation to the above case, any Capital Asset whose purchaseprice is less than $10,000 not eligible for capital gain tax. Considering these laws, only the listedshares and this home sound system that has been sold by Eric is eligible for capital gain tax.(Australian tax authority)Finally net capital gain or loss on assets of Eric is as below:AssetsPurchasePriceSelling PriceCapital gain/(loss)Home sound system$ 12,000$ 11,000$ (1,000)Shares in a listedcompany$ 5,000$ 20,000$ 15,000Total$ 17,000$ 31,000$ 14,000
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