Taxation Law

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
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1TAXATION LAW
Table of Contents
Answer to question 1:...................................................................................................2
Answer to question 2:...................................................................................................3
Answer to question 3:...................................................................................................4
References:..................................................................................................................6

2TAXATION LAW
Answer to question 1:
Capital gains from antique paintings:
“Sec 100-25(1), ITA Act 97” restricts the assets based on which the capital
gains tax regimes are applied for the assets those are acquired on or following the
20/9/85. It is noteworthy to understand that the up to 21 sep 1999 only real gains
were considered for tax under the regimes of CGT (Lawrence 2019). Assets that are
purchased after the 20/9/85 is regarded as post-CGT asset where capital gains tax is
applied. Notably, if the assets are purchased before 20/9/85 then it is treated as pre-
CGT asset and no capital gains tax is imposed when making capital gains.
Helen sells the painting which her father has purchased in February 1985.
She disposed it on 2018 for $12,000. By selling the painting she made capital gains.
As noted the painting is the pre-CGT asset and the capital gains that she has made
will be exempted from the capital gains.
Capital gains from historical sculpture:
Under “s 104-10(1), ITAA 1997” a CGT event A1 happens when the capital
gains are made. Collectables should be referred as the asset that is defined in
“s108-10, ITAA 97”. Assets such as rare stamps, artworks in the form of paintings
and sculptures, antiques usually held as collectables (O’Connell 2017). These assets
are under the passion of taxpayers for their private use purpose. One must denote
that the “s6-10” considers the capital gains as the statutory income which is a
taxable under “s102-5(1)”.
So as the situation unfolds it is noticed that historical sculpture that was
purchased in 2018 was sold for $6,000. The piece of sculpture was purchased in
1993 for $5,500. So when disposing the sculpture, it led to CGT event A1 under
“s104-10(1), ITAA 97”. The sculpture is a collectable defined in “s108-10, ITAA
97”. When she sold the sculpture a capital gains happened and the capital gains
should be denoted as statutory income for Helen which is which is a taxable under
“s102-5(1)”.
Capital gains from antique jewellery:
A noteworthy discussion has been made under the “s108-10(1)” concerning
the collectables (Evans and Krever 2017). This includes that the capital loss that is
made from the collectables are required to be solely offset from the capital gains of
other collectables.
An attention-grabbing situation develops for Helen when the antiques
jewellery that she purchased by paying a price of $14,000 only got $13,000 upon
selling the same. Therefore, the jewellery is treated as collectables under “s108-10,
ITAA 97”. So the jewellery has fetched loss for Helen. Referring to the special rules
given in “s108-10 (1)”, for collectables capital loss that is made from the jewellery
are required to be solely offset from the capital gains of sculpture.
Capital gains from picture:
A CGT asset under “s108-20” is also treated as the personal use asset that
is largely kept by the taxpayer for their personal use and enjoyment but it is different
from the collectables. The capital gains that is made from personal use asset that