Taxation Laws: Personal Exertion Income, Interest Income, and Capital Gains Tax

Running head: TAXATION LAW
Taxation Laws
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1TAXATION LAW
Answer to question 1:
Issue:
The existing issue is ascertaining whether or not the income from personal exertion is
taxable in relation to “section 6-5 of the ITAA 1997”?
Laws:
 “Section 6-5 of the ITAA 1997”
 “Scott v CT (1935)”
 “Brent v FCT” “Marshall v Housden (Inspector of Taxes) 1958” “Hobbs v Hussy (1942) TC 153)”
Applications:
The situation opens up where Hilary was regarded as one of the well-known mountain
climber. She was later offer money by the News Paper company to tell her life story. She
agreed to narrate story and vests all her interest to newspaper company. As per “section 6-1
of the ITAA 1936” income obtained from personal exertion refers to income from salaries or
wages of benefits (Peiros and Smyth 2017). “Section 6-5 of the ITAA 1997” defines income
that are mostly received by taxpayer from ordinary concepts. As per the decision of “Brent v
FCT” the receipt of $10,000 would be classified as income from ordinary concepts which is
taxable under “section 6-5 of the ITAA 1997” (Mares and Queralt 2015).
Hilary later sold her manuscripts and photographs to the library. Stating the decision
of “Marshall v Housden (Inspector of Taxes) 1958” income derived from sale of manuscripts
will be taxable under ordinary concepts of section 6-5 of the ITAA 1997 (Smith 2015).

2TAXATION LAW
If she decides to write the book herself then and received money from such sale will
be classified as royalty income. Citing the case of “Hobbs v Hussy (1942) TC 153)” the sale
of autobiographies results in royalty income which is taxable under “section 6-5 of the ITAA
1997”.
Conclusion:
The receipt of$10,000, $5000 and $2000 will be included as personal exertion income
which is taxable under “section 6-5 of the ITAA 1997”.
Answer to question 2:
Answer to question 3:
Issue:
The issue here is understanding whether the interest that is earned from loan given to
son would be held assessable taxable under “section 6-5 of the ITAA 1997”?
Laws:
 “Section 6-5 of the ITAA 1997”
 “Mayes v Hochstrasser (1960)”
 “FCT v Countess of Bective (1947)”