Taxation Law

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

TAXATION LAW1
1
Part 1
The first part of the situation involves the CGT consequence of the sale of painting by Helen.
As provided under section 108. 10 of the ITAA 97, an antique painting will be admitted as a
CGT assets under the category of collectibles and any transaction related to the same as a
CGT event. A CGT gain or loss incurred under section 102.2 of the ITAA 97 always needs to
be accompanied by a CGT event under section 104.5 of the ITAA 97. An A1 category of
CGT event will be attracted in case a CGT asset has been disposed off by means of sale as
provided under the section 104.10 of the ITAA 97. The timing of the acquisition of a CGT
asset needs to be assessed with respect to the time of conferring of ownership upon the
taxpayer under section 109.5 of the ITAA 97.
It has not been expressly provided in the given situation as to when exactly the painting has
been purchased or acquired by Helen. Any CGT asset that has been purchased after the date
of 20 September 1985 will be permitted to be computed as a CGT asset. In this particular
instance the painting depicts a collectible and needs to be computed accordingly. The cost
base in this case will be the first element that is the purchase price of $4,000 under section
110.25 of the ITAA 97. The painting has been conferred upon Helen by either succession or
gift as the same has been initially purchased by her father. The cost proceed will be $12,000.
Hence the CGT gain will be computed by finding the difference between CP and CB. Being
held for more than 1 year 50% discount will be allowed.
Part 2
The second part of the situation involves the CGT consequence of the sale of historical
sculpture by Helen.

TAXATION LAW2
As provided under section 108. 10 of the ITAA 97, an historical sculpture will be admitted as
a CGT assets under the category of collectibles and any transaction related to the same as a
CGT event. A CGT gain or loss incurred under section 102.2 of the ITAA 97 always needs to
be accompanied by a CGT event under section 104.5 of the ITAA 97. An A1 category of
CGT event will be attracted in case a CGT asset has been disposed off by means of sale as
provided under the section 104.10 of the ITAA 97. The timing of the acquisition of a CGT
asset needs to be assessed with respect to the time of conferring of ownership upon the
taxpayer under section 109.5 of the ITAA 97.
The time of acquisition of the sculpture by Helen has been provided in the instance to be on
December 1993. Any CGT asset that has been purchased after the date of 20 September 1985
will be permitted to be computed as a CGT asset. In this particular instance the sculpture
depicts a collectible and needs to be computed accordingly. The cost base in this case will be
the first element that is the purchase price of $5500 under section 110.25 of the ITAA 97.
The cost proceed will be $5000. Hence the CGT gain will be computed by finding the
difference between CP and CB. Being held for more than 1 year 50% discount will be
allowed. Therefore the CGT gain will be $500.
Part 3
The third part of the situation involves the CGT consequence of the sale of antique jewellery
by Helen.
As provided under section 108. 10 of the ITAA 97, an antique jewellery will be admitted as a
CGT assets under the category of collectibles and any transaction related to the same as a
CGT event. A CGT gain or loss incurred under section 102.2 of the ITAA 97 always needs to
be accompanied by a CGT event under section 104.5 of the ITAA 97. An A1 category of
CGT event will be attracted in case a CGT asset has been disposed off by means of sale as