Taxation Law

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Author Note

1TAXATION LAW
Answer No.1:
PART 1:
The instant case study deals with identification together with the analysis of the CGT
(Capital Gain Consequences) resulting out of the transactions made by Helen in the following
instances.
On February 1985, father of Helen made a purchase of a painting for 4000$ which she
sold at a selling price of 12000$ on December 1st of 2018. The antique painting is a
collectable as well as a capital gain asset as per section 180.10(2) of the Income Tax
Assessment Act 1997. When a CGT incident occurs, a corresponding capital loss CL or
capital gain CG occurs and when such CGT event happens, loss or gain corresponds to such
event. This is stated by s. 102-20 of the Act. Section 102-20 of IAA says that CGT is
triggered when a CGT event takes place by construing to the table supplied in section 104.5.
Similarly section 104.10 (1) asserts that whenever a CGT asset is disposed off or sold, an A1
CGT event also happens. The TP assumes the role of an owner when the asset is taken as per
section 109-5(1).
From the facts of the case, it cannot be known when Helen got the possession of the
painting from his father. If she got it before 20 September 1985, it will not attract CGT
provisions as it is a pre CGT asset. When it is incurred after the said date, it will act as a
collectable. CB E1 under sec. 110-25 (2) equals to 4000$. From her father, she got it either
by gift or being an heir. CB gets modified as per the market value of the painting on the date
of acquisition as given in section 112-20. CP= selling price of painting=12000 dollars as in
section 116.20. CG= CP-CB; capital gain is equal to cost proceeds minus by cost base. If she
holds the asset for more than 1 year, she acquires the eligibility of the discount of 50 percent
under Division 115.

2TAXATION LAW
Part 2:
The Issue here is the identifying the CGT result on sale of historic sculpture by Helen.
The sculpture was bought by her for 5500 $ and she sold it for 6000 $. The historic
sculpture that Helen made a sale amounts to a collectable and a CG as per sub section 2 of
108.10 of the ITAA1997. Section 102-20 of IAA says that CGT is triggered when a CGT
event takes place by construing to the table supplied in section 104.5. Similarly section
104.10 (1) asserts that whenever a CGT asset is disposed off or sold, an A1 CGT event also
happens. In this case, the acquiring time of the asset is December ’93 when she herself
bought it. Thus it appears that sculpture is a post CGT asset. Its disposal date also reveals that
it accounts for a CGT A1 event as found in section 104.10(1). The CB E1 as in section 11-
25(2) accounts for the selling price of 5500$. CP = 6000$ as in section 116.20. the CG= CP-
CB=6000-5500 $. It is being a positive number indicates that gain has occurred. Thus
CG=500 dollars. It also indicates that she will get 50% discount under the provisions of Div
115.
Part 3:
The Issue here is the identifying the CGT result on sale of jewellery piece by Helen.
She bought the jewellery for 14000 $ on October 1987and sold it off for 13000$ on 20th
March 2018.
The piece of jewellery that Helen made a sale amounts to a collectable and a CG as
per sub section 2 of 108.10 of the ITAA1997. Section 102-20 of IAA says that CGT is
triggered when a CGT event takes place by construing to the table supplied in section 104.5.
Similarly section 104.10 (1) asserts that whenever a CGT asset is disposed off or sold, an A1
CGT event also happens. The TP assumes the role of an owner when the asset is taken as per
section 109-5(1).