Taxation Law: Capital Gains Tax, Fringe Benefits and FBT Year

Running head: TAXATION LAW
Taxation Law
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1TAXATION LAW
Table of Contents
Introduction:...............................................................................................................................2
Answer to question 1:.................................................................................................................2
Answer to question 2:.................................................................................................................5
Answer to B:..............................................................................................................................9
References:...............................................................................................................................10

2TAXATION LAW
Introduction:
Capital gains tax functions by the considering the taxable income during the tax year
in which the asset is sold or else disposed to the taxpayer (Engelmann et al. 2017). If the
individual taxpayer is the company, then in such a situation the company should pay 30% on
the net amount of capital gains. If the person is the individual, the tax rate will be similar to
that of the individual tax rate during the year.
Answer to question 1:
Vacant Land:
The treatment of tax for the land and the profits from the sales of those land is in
general reliant on whether it is treated as the capital asset or the matter of business or the
business transactions. Capital gains tax is taken into the account as vacant land is the capital
asset. Still, when the transactions of land are assumed as the element of the business activity,
the sale proceeds of the land may be treated as the ordinary income and might be subjected to
GST (Tanzi 2014). A capital gains tax liability will arise if a vacant land is acquired by the
person. The vacant land sums up as the capital asset. But when an individual purchase the
land to use it in the business or for making revenue then the person is dealing in the activity
of land. The sale proceeds of the land are the ordinary income where the taxpayer will be
compelled to register under the goods and service tax.
Selling the block of empty land at $320,000 amounts to capital gains tax. The cost
base of the vacant land will be including the outlays that the taxpayer has reported throughout
the time when the land was in possession of the taxpayer will be added with the purchase
price. The capital gains from the empty land will be included for assessment purpose.

3TAXATION LAW
Antique Bed:
As per the “section 149-10 of the ITAA 1997” a pre-CGT asset that is owned by a person
only when the person last purchased the asset before the 20 September 1985 (Mares and
Queralt 2015). All the assets that is purchased since capital gains tax started on the September
1985 there will be the CGT unless it is specifically excluded. The example of the CGT is
applied to the real estate, leases or goodwill, foreign currency, collectables as well as the
personal usage assets that are further than the certain value.
When there is loss or destruction of the CGT asset there is a CGT event C1 under “SECT
104.20 of ITAA 1997” (Genovese, Scheve and Stasavage 2016). CGT event C1 happens if
the CGT asset that a person owned is lost or destroyed. This event is generally applying to a
portion of the CGT asset under the section 108-5 when the time of the event is;
a. When the person obtains the compensation for the loss or the destruction or;
b. If there is no compensation received following the discovery or destruction taking
place.
A person makes the capital gains if the capital proceeds obtained from the loss or
destruction of the assets is greater than the cost base of the assets. simultaneously, a person
makes capital loss if the capital proceeds is lower than the reduced cost base of the assets
(Ábrahám, Koehne and Pavoni 2016). The antique bed is the collectables that is beyond the
certain value. A CGT event C1 happened when the compensation amounting to $11,000 for
the loss of stolen antique bed was received.
Painting: