Tax Law and Case Scenarios in Australia
Added on 2020-04-01
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Assessment task 2
TABLE OF CONTENTSSolution 1......................................................................................................................3Issue..........................................................................................................................3Regulations...............................................................................................................3Applicability...............................................................................................................3Conclusion................................................................................................................3Solution 2......................................................................................................................3Issue..........................................................................................................................3Regulations...............................................................................................................3Applicability...............................................................................................................3Conclusion................................................................................................................3Solution 3......................................................................................................................3Issue..........................................................................................................................3Regulations...............................................................................................................3Applicability...............................................................................................................3Conclusion................................................................................................................3Solution 4......................................................................................................................3Issue..........................................................................................................................3Regulations...............................................................................................................3Applicability...............................................................................................................3Conclusion................................................................................................................3Solution 5......................................................................................................................3Issue..........................................................................................................................3Regulations...............................................................................................................3Applicability...............................................................................................................3Conclusion................................................................................................................3
SOLUTION 1IssueIn the given case description; Eric is engaged in acquiring and disposal of assetsdue to which he will be liable to pay tax on thenet capital gain. Therefore theissue ofthis question is thecomputation of taxable amount for net capital gain or loss byconsidering all transactions. RegulationsAs per capital gain taxation provisions of Australia; if holding period of capital assetsis less than 12 months then thecomputation of taxable amount is done by makinguse of other method which is the easiest method (Harding, 2013). In this method;themere purchase price of anasset is deducted from sale amount, and taxableamount is determined. ApplicabilityAccording to the case facts; other method will be applied as holding period of assetsis not exceeding 12 months. Computation of taxable amount for Eric by applying thismethod is as follows:AssetsPurchase costSales priceLoss or gain(Sales price-Purchase cost)Antique vase$2,000.00$3,000.00$1,000.00 (gain)Antique chair$3,000.00$1,000.00$2,000.00 (loss)Painting$9,000.00$1,000.00$8,000.00 (loss)Home soundsystem$12,000.00$11,000.00$1,000.00 (loss)Shares in a listedcompany$5,000.00$20,000.00$15,000.00(gain)Net capital gain$5000.00ConclusionAccording to cited computation taxable amount for Eric is $5000.00.
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