Taxation Law

Running Head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note

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TAXATION LAW
Table of Contents
Question 1........................................................................................................................................3
Part 1............................................................................................................................................3
Part 2............................................................................................................................................4
Part 3............................................................................................................................................5
Part 4............................................................................................................................................5
Question 2........................................................................................................................................6
Part 1............................................................................................................................................6
$13000..........................................................................................................................................7
$13400..........................................................................................................................................7
$4350............................................................................................................................................8
$3200............................................................................................................................................8
Part 2................................................................................................................................................8
Question 3........................................................................................................................................9
Application......................................................................................................................................9
Conclusion.....................................................................................................................................10
Reference List................................................................................................................................11

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TAXATION LAW
Question 1
Part 1
In this case the issue is determination of the monetary gain consequences by the sales of the
antique painting by Helen.
This painting can be considered as a collectible item as well as an asset for capital gain according
to the conditions of section 108-10(2) ITAA97. According to the statements of section 102.2,
CGT will be in card only if there is any CGT event according to the provisions of section 104-5.
Sales of any CGT asset as well as the disposal of the same will be considered as CGT event A1
according to the provisions of section 104-10(1). The concerned timing of acquisition of the
Asset is when the ownership lies with the taxpayer, according to the provisions of the section
109-5(1).
The statement of the facts makes it and clears whether Helen had acquired the painting. The
reason is that the actual purchase was made by Helen’s father. In case is the purchase was made
before 28 September in 1985, it might be exempted from CGT as in that case it will be
considered as a pre CGT asset (Barkoczy 2016). Again, if the acquisition was done after that
specified date, then that asset will be considered to be collectible. As per the provisions of
section 110-25(2) element one, the cost base will be the acquisition price, that is 4000 US
dollars. However, since Helen could have acquired the Asset by means of death or as gift, there
will be a modification in the cost base depending on the market valuation during the time of
acquisition according to the section 112-20. In this case, the capital proceeds will be fixed at the
sale price of 12000 US Dollars according to the section 116-4.20. The capital gain will be
calculated after reducing the cost base from the capital proceeds. In case if the Asset had been

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TAXATION LAW
under his ownership for over a year, she will get the benefit of 50% discount on that asset
according to the division 115.
Part 2
In this case the problem is determining the CGT consequences against the sales of the historical
structure by Helen.
The structure which Helen sold is a collective item and there is an associated capital gain asset
according to the solutions of section 108-10(2) ITAA97 (Sadiq et al. 2012). According to the
provisions of section 102.2,sales or disposal of any CGT asset will be determined as CGT event
A1 according to the provisions of the section 104-10(1). The concerned timing of acquisition of
the Asset is when the ownership lies with the taxpayer, according to the provisions of the section
109-5(1).
In this case the timing of transaction is December of 1993 which makes it a transaction in the
post CGT time period which makes it a post CGT asset along with its disposal, a CGT event A1
ACCORDING to the provisions of section 104-10(1) (Sadiq et al. 2012). In this case, according
to the section 110-25(2) element one, the cost base will be same as the acquisition price of
$5,500. The selling price of 6000 US dollars will be same as capital proceeds in this case as per
the provisions of section 116. 20. The capital benefit in this case will be the value after deduction
of cost base from capital proceeds. This means that the entire capital benefit for this sale
achieved by Helen will be the value after deduction of 5500 from 6000, which makes the total
capital gain of $500. As an outcome, it is evident that she will be applicable for the 50% discount
according to the provisions of section 115. 10 and as an individual she has been holding the