Taxation Law: Capital Gain Tax Consequences

Running head: TAXATION LAW
TAXATION LAW
Name of Student
Name of University
Author Notes

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..................................................................................................................................8
Conclusion...................................................................................................................................8
Reference.......................................................................................................................................10

2TAXATION LAW
Answer 1
Issue
In this case four separate issues can be found all of which can be related to the Capital
Gain Tax consequences. These consequences are the effects of the transactions of Helen funding
of her business as a fashion designer. The first issue is the Capital Gain Tax consequence of an
antique impressionism painting bought by Helen’s father for $4,000 in February 1985 that was
sold by Helen for $12,000 on 1st December 2018. The second issue is the Capital Gain Tax
consequence for a historical sculpture purchased for $5,500 on December 1993 that was sold for
$6,000 on 1st January 2018. The third issue is the Capital Gain Tax consequence of an antique
jewellery piece purchased for $14,000 in October 1987 that Helen sold for $13,000 on 20th
March 2018. The final issue in this case is the Capital Gain Tax consequence for a picture sold
by Helen on 1st July 2018 for $5,000 that her mother purchased in March 1987 for $470.
Rule
Section 102.20 of the Income Tax Assessment Act 1997 grants the status of Capital Gain
Tax consequence of profit or loss accrued by virtue of the occurrence of the Capital Gain Tax
events. Section 104.10 of the Income Tax Assessment Act 1997 under the A1 category renders
the sale of the Capital Gain Tax assets to be treated as CGT event. However the applicability of
the CGT will be effective with respect to the CGT assets that have been acquired after 20th
September 1985. Assets that have been acquired before the date mentioned before would not be
treated under the Capital Gain Transaction and would be considered as an exemption to the CGT.