Taxation Law

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID

TAXATION LAW1
Table of Contents
Answer to question 1:.................................................................................................................2
Answer to 1:...........................................................................................................................2
Answer to 2:...........................................................................................................................2
Answer to 3:...........................................................................................................................2
Answer to 4:...........................................................................................................................3
Answer to question 2:.................................................................................................................4
Answer to question 3:.................................................................................................................6
References:.................................................................................................................................8

TAXATION LAW2
Answer to question 1:
Answer to 1:
According to the “section 102-20, ITAA 1997” the taxpayers only makes capital
gains or loss if the CGT event takes place (Evans, Minas and Lim 2015). Accordingly, a CGT
event A1 happens under “section 104-10 (1) of the ITAA 1997” when the CGT asset is sold.
Capital gains tax is generally applicable on the assets that is purchased or events that takes
place after the 20 September 1985 (Burkhauser, Hahn and Wilkins 2015). Similarly, the term
pre-CGT and post-CGT are commonly used to for the assets that is purchased before or
following the aforementioned date. An antique impression painting was bought by Halen’s
father in February 1985 for a sum of $4,000. Therefore, the asset is bought before the CGT
scheme was introduced and as a result the sale of painting is regarded as pre-CGT asset and
hence it is exempted from the capital gains tax purpose for Helen.
Answer to 2:
“Section 108-10(2) of the ITAA 1997” explains that a collectible is anything that is
mainly used or kept by the taxpayers for their own enjoyment and usage (Grudnoff, 2015).
This includes the antique objects, jewellery or a rare folio. “Section 118-10 (1), ITAA 1997”
explains that the collectables that are bought for less than $500 are considered exempted from
the CGT provision under “section 110-10 (1)” (Feld et al. 2016). Helen sold the historical
sculpture on 1st January 2018 for a sum of $6,000 which was originally bought for $5,500. As
a result, the sale of sculpture resulted in capital gains and hence the capital gains will be
included for into the assessable income of Helen for taxable purpose.
Answer to 3:
Capital gains or capital gains loss should be disregarded under the “section 118-10
(2), ITAA 1997” from collectibles under the first element of the collectible cost base is lower