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(Solution) Taxation Law: Assignment

   

Added on  2021-04-19

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Running head: TAXATION LAWTaxation LawName of the StudentName of the UniversityAuthors NoteCourse ID
(Solution) Taxation Law: Assignment_1

TAXATION LAW1Table of ContentsAnswer to question 1:.................................................................................................................2Answer to A:..............................................................................................................................2Answer to B:..............................................................................................................................3Answer to C:..............................................................................................................................4Answer to D:..............................................................................................................................4Answer to E:...............................................................................................................................5Answer to question 2:.................................................................................................................6Answer to question 3:.................................................................................................................8Answer to question 4:...............................................................................................................10References................................................................................................................................13
(Solution) Taxation Law: Assignment_2

TAXATION LAW2Answer to question 1: Answer to A: According to “Section 6-5 and 6-10 (3) of the ITAA 1997” a person is taken to haveobtained the sum when it is applied or dealt with in a manner on their behalf or as they direct.“Subsection 6-2 (2) of the ITAA 1997” lay down that a person is assessable for income thatare derived directly sources or indirectly sources during the earnings year1. The “taxationruling of TR 2002/14” provides the situations where the large sum would be treated asprepaid rent. The “Taxation ruling of TR 2002/14” provides that a lump sum prepaid rent wouldbe held assessable if the intention of the parties represents that the large amount ofimbursement as an early payment is for an individual’s use and enjoyment of the residencefor the static term period2. As evident in the current situation the taxpayer owns a flat andleases to same to a new tenant and received a prepaid lump sum of $15,000 for leasenegotiation. As held in the case of “Frezier v Commissioner of Stamp Duties (NSW)” thetaxation board stated that amount of prepaid lump sum was in fact the rent.3 The taxationboard held that the prepaid lump sum carried the nature of come home to the taxpayer and theamount was fully assessable during the year of receipt. Referring to the Arthurs Case in the1Guner, Nezih, Remzi Kaygusuz, and Gustavo Ventura. "Income taxation of US households:Facts and parametric estimates."Review of Economic Dynamics17.4 (2014): 559-581.2Tanzi, Vito. "Inflation, indexation and interest income taxation."PSL QuarterlyReview29.116 (2014).3McDaniel, Paul.Federal Income Taxation. Foundation Press, 2017.
(Solution) Taxation Law: Assignment_3

TAXATION LAW3current situation, the receipt of prepaid lump sum of $15,000 by the landlord would beincluded in his assessable income under section as income under regular impression. Answer to B: Insurance pay-outs is regarded as the entirely personal items that does not requires tobe included in their tax return4. However according to Australian taxation office receipts ofinsurance payments for items that are used in the production of income might have to beincluded in the taxable return. Given the circumstances that an individual receiving a lumpsum insurance payment to cover the assets, then the person is required to apportion the sumof payment between the assets for the taxation purpose. As evident in the current situation theCheryl owned a warehouse that was demolished by fire and got a sum of $500,000 from theinsurance company as the compensation for the loss. According to the judgement held in “Allied Mills Industries Pty Ltd v FCT (1989)”the commissioner stated that the character of reimbursement incomes is reliant upon the sumthat is received5. Compensations generally represents a capital item unless in the situation ofsubstitution principle it replaces what was lost. It is worth mentioning that the loss ofemployment the compensation payment would be considered as the income since itrepresents the substitute for what was lost. In the current situation of Cheryl, thecompensation payment received by the insurance company constitutes a capital receipt as theloss of warehouse by fire is a capital item6. Referring to above judgement the payment would4Bankman, Joseph, et al.Federal Income Taxation. Wolters Kluwer Law & Business, 2017.5Mares, Isabela, and Didac Queralt. "The non-democratic origins of incometaxation."Comparative Political Studies48.14 (2015): 1974-2009.6Geier, Deborah A. "US Federal Income Taxation of Individuals 2015." (2015).
(Solution) Taxation Law: Assignment_4

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