Taxation Law: Capital Gain Tax, Personal Exertion Income, and Taxable Income

Running head: TAXATION LAW
TAXATION LAW
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1TAXATION LAW
Table of Contents
Answer 1..........................................................................................................................................2
Issue.............................................................................................................................................2
Rule..............................................................................................................................................2
Application..................................................................................................................................3
Conclusion...................................................................................................................................4
Answer 2..........................................................................................................................................5
Issue.............................................................................................................................................5
Rule..............................................................................................................................................5
Application..................................................................................................................................6
Conclusion...................................................................................................................................6
Answer 3..........................................................................................................................................7
Issue.............................................................................................................................................7
Rule..............................................................................................................................................7
Application..................................................................................................................................7
Conclusion...................................................................................................................................8
Reference.........................................................................................................................................9

2TAXATION LAW
Answer 1
Issue
In this case, there are four separate issues that can all be related to the consequences of
the Capital Gain Tax. These are the effects of transactions relating to Helen financing her
business as a fashion designer. The first issue is the Capital Gain Tax consequence of Helen's
father's purchased antique impressionism painting for $ 4,000 in February 1985, which Helen
sold for $ 12,000 on December 1, 2018. The second issue is the Capital Gain Tax consequence
for a historic sculpture purchased on December 1993 for $5,500, which was sold on January 1,
2018 for $6,000. The third issue is the Capital Gain Tax consequence of a piece of antique
jewelry bought in October 1987 for $14,000 that Helen sold on March 20, 2018 for $13,000. The
final issue in this case is the Capital Gain Tax consequence for a picture sold by Helen on 1 July
2018 for $ 5,000 her mother bought for $ 470 in March 1987.
Rule
Section 102.20 of the Income Tax Assessment Act 1997 grants the status of Capital Gain
Tax resulting from profit or loss accrued as a result of capital gain tax events occurring. Section
104.10 of the 1997 Income Tax Assessment Act in the category A1 makes the sale of capital gain
tax assets to be treated as a CGT event. However, the CGT's applicability in respect of the CGT
assets acquired after September 20, 1985 will be only effective. Assets acquired prior to the
above date would not be treated under the Capital Gain Transaction and would be treated as an
exemption to the CGT.
Section 108.10(2) of the 1997 Income Tax Assessment Act defines the term ' collectible. '
Under the Income Tax Assessment Act, the word collectible can be defined as an item owned by