Taxation Law
Added on 2023-03-31
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Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Author Note
Taxation Law
Name of the Student
Name of the University
Author Note
1TAXATION LAW
Question 1
Answer 1
The question arising from the situation is the consequence of the sale of antique painting by
Helen in relation to capital gain taxation.
As defined under s. 108.10 of the ITAA 1997, an antique painting will come under the
definition of a collectible and will be e assessed as a CGT asset. A CGT gain as well as loss
as given in s102.2 of the ITAA 1997 always needs to accompany a CGT event as listed in s
104.5 of the ITAA 1997. As listed in s104.10 of the ITAA 1997, the sale of an asset to
dispose it off permanently coming under the CGT computation, will point towards the
category of CGT event A1. The time when the taxpayer has acquired a CGT asset is the time
when the ownership has been conferred upon him as provided in s109.5 of the ITAA 1997.
The time of acquisition of the painting by Helen has not been mentioned in the given
scenario. This is owing to the fact that the painting has when acquired by Helen’s father. To
be admitted to be assessed as a CGT asset the painting needs to be acquired on or after the
date of 20-09-1985. Any asset acquired on a date preceding the prescribed one will be e
excluded from being admitted as a CGT asset. In this case if the painting has complied with
the date requirement it will be considered to be a collectible and subject to CGT accordingly.
The CGT gain or loss is required to be calculated by deducting the lower of the cost base and
the cost proceed from the other one. In the present situation the cost base will be the
acquisition price which is the element one amounting to $4,000. The painting being
purchased by her father she may have conferred with the ownership of the same either by
death or gift. Such an event will require the cost base to be altered with respect to market
value that existed during the time of acquisition under s112.20 of the ITAA 1997. The capital
proceed will imply the price obtained through sale amounting to $12000. The event may also
Question 1
Answer 1
The question arising from the situation is the consequence of the sale of antique painting by
Helen in relation to capital gain taxation.
As defined under s. 108.10 of the ITAA 1997, an antique painting will come under the
definition of a collectible and will be e assessed as a CGT asset. A CGT gain as well as loss
as given in s102.2 of the ITAA 1997 always needs to accompany a CGT event as listed in s
104.5 of the ITAA 1997. As listed in s104.10 of the ITAA 1997, the sale of an asset to
dispose it off permanently coming under the CGT computation, will point towards the
category of CGT event A1. The time when the taxpayer has acquired a CGT asset is the time
when the ownership has been conferred upon him as provided in s109.5 of the ITAA 1997.
The time of acquisition of the painting by Helen has not been mentioned in the given
scenario. This is owing to the fact that the painting has when acquired by Helen’s father. To
be admitted to be assessed as a CGT asset the painting needs to be acquired on or after the
date of 20-09-1985. Any asset acquired on a date preceding the prescribed one will be e
excluded from being admitted as a CGT asset. In this case if the painting has complied with
the date requirement it will be considered to be a collectible and subject to CGT accordingly.
The CGT gain or loss is required to be calculated by deducting the lower of the cost base and
the cost proceed from the other one. In the present situation the cost base will be the
acquisition price which is the element one amounting to $4,000. The painting being
purchased by her father she may have conferred with the ownership of the same either by
death or gift. Such an event will require the cost base to be altered with respect to market
value that existed during the time of acquisition under s112.20 of the ITAA 1997. The capital
proceed will imply the price obtained through sale amounting to $12000. The event may also
2TAXATION LAW
be allowed with discount of 50% under division 115 if the asset involved has been sold by the
taxpayer for a period exceeding one year.
Answer 2
The question arising from the situation is the consequence of the sale of historical sculpture
by Helen in relation to capital gain taxation.
As defined under s. 108.10 of the ITAA 1997, an historical sculpture will come under the
definition of a collectible and will be assessed as a CGT asset. A CGT gain as well as loss as
given in s102.2 of the ITAA 1997 always needs to accompany a CGT event as listed in s
104.5 of the ITAA 1997. As listed in s104.10 of the ITAA 1997, the sale of an asset to
dispose it off permanently coming under the CGT computation, will point towards the
category of CGT event A1. The time when the taxpayer has acquired a CGT asset is the time
when the ownership has been conferred upon him as provided in s109.5 of the ITAA 1997.
The time of acquisition of the sculpture by Helen was December 1993. To be admitted to be
assessed as a CGT asset the sculpture needs to be acquired on or after the date of 20-09-1985.
Any asset acquired on a date preceding the prescribed one will be e excluded from being
admitted as a CGT asset. In this case the sculpture has complied with the date requirement
and will be considered to be a collectible and subject to CGT accordingly. The CGT gain or
loss is required to be calculated by deducting the lower of the cost base and the cost proceed
from the other one. In the present situation the cost base will be the acquisition price which is
the element one amounting to $5500. The capital proceed will imply the price obtained
through sale amounting to $6000. This transaction has incurred a CGT gain of $500. The
event may also be allowed with discount of 50% under division 115 if the asset involved has
been sold by the taxpayer for a period exceeding one year.
Answer 3
be allowed with discount of 50% under division 115 if the asset involved has been sold by the
taxpayer for a period exceeding one year.
Answer 2
The question arising from the situation is the consequence of the sale of historical sculpture
by Helen in relation to capital gain taxation.
As defined under s. 108.10 of the ITAA 1997, an historical sculpture will come under the
definition of a collectible and will be assessed as a CGT asset. A CGT gain as well as loss as
given in s102.2 of the ITAA 1997 always needs to accompany a CGT event as listed in s
104.5 of the ITAA 1997. As listed in s104.10 of the ITAA 1997, the sale of an asset to
dispose it off permanently coming under the CGT computation, will point towards the
category of CGT event A1. The time when the taxpayer has acquired a CGT asset is the time
when the ownership has been conferred upon him as provided in s109.5 of the ITAA 1997.
The time of acquisition of the sculpture by Helen was December 1993. To be admitted to be
assessed as a CGT asset the sculpture needs to be acquired on or after the date of 20-09-1985.
Any asset acquired on a date preceding the prescribed one will be e excluded from being
admitted as a CGT asset. In this case the sculpture has complied with the date requirement
and will be considered to be a collectible and subject to CGT accordingly. The CGT gain or
loss is required to be calculated by deducting the lower of the cost base and the cost proceed
from the other one. In the present situation the cost base will be the acquisition price which is
the element one amounting to $5500. The capital proceed will imply the price obtained
through sale amounting to $6000. This transaction has incurred a CGT gain of $500. The
event may also be allowed with discount of 50% under division 115 if the asset involved has
been sold by the taxpayer for a period exceeding one year.
Answer 3
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