Taxation

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

TAXATION1
Answer 1
Part 1
The CGT consequences arising out of the sale of antique impressionism painting owned by
Helen for the purpose of assisting her fashion designing business.
The disposal of a painting by way of sale is to be assessed as a CGT event and it should be
viewed as a collectible, which falls under the class of CGT asset, which can be seen from
section 108. 10 of the ITA Act 1997. A CGT loss or gain, the provision for which has been
contained in section 102.2 of the ITA Act 1997 is only possible when there is a CGT event
occurring as contained in section 104.5 of the ITA Act 1997. The A1 category of CGT event
as provided in the section 104.10 of the ITA Act 1997 is triggered when a CGT asset is
permanently disposed off as being sold. The time at which the individual making payment of
the tax will actually conferred with the ownership of a CGT asset will be treated as its
acquisition time under section 109.5 of the ITA Act 1997.
There cannot be found any evidence of any clear mention of the time during which Helen has
acquired the painting. The painting needs to have been purchased on a date following 20th
September 1985 for the purpose of being permitted to be assessed as a CGT asset and to be
admitted in the computation of CGT liability. Any CGT asset purchased prior to that will be e
allowed as an exemption from the CGT liability computation. The painting in question is
required to be assessed as a collectible. The cost base pertaining to the painting as has been
contained in section 110.25 of the ITA Act 1997 is $4000 which is the acquisition price being
the first element of the cost base. The initial purchase of the painting was made by Helen’s
father, which implies that it has been conferred upon Helen either in the form of succession
or gift. This requires an adjustment to be made to the cost base complying with the market
value of the painting when the acquisition has been made as provided in section 112.20 of the

TAXATION2
ITA Act 1997. The cost proceed in this case under section 116.20 of the ITA Act 1997 is
$12000. The difference between the cost base and the cost proceed will provide a CGT loss
or gain. Under division 115, a 50% discount will be given if the asset was owned for a period
exceeding one year.
Part 2
The CGT consequences arising out of the sale of historical sculpture owned by Helen for the
purpose of assisting her fashion designing business.
The disposal of a sculpture by way of sale is to be assessed as a CGT event and it should be
viewed as a collectible, which falls under the class of CGT asset, which can be seen from
section 108. 10 of the ITA Act 1997. A CGT loss or gain, the provision for which has been
contained in section 102.2 of the ITA Act 1997 is only possible when there is a CGT event
occurring as contained in section 104.5 of the ITA Act 1997. The A1 category of CGT event
as provided in the section 104.10 of the ITA Act 1997 is triggered when a CGT asset is
permanently disposed off as being sold. The time at which the individual making payment of
the tax will actually conferred with the ownership of a CGT asset will be treated as its
acquisition time under section 109.5 of the ITA Act 1997.
The historical sculpture has been bought by Helen on the month of December 1993. The
historical sculpture needs to have been purchased on a date following 20th September 1985
for the purpose of being permitted to be assessed as a CGT asset and to be admitted in the
computation of CGT liability. Any CGT asset purchased prior to that will be e allowed as an
exemption from the CGT liability computation. The historical sculpture in question is
required to be assessed as a collectible. The cost base pertaining to the sculpture as has been
contained in section 110.25 of the ITA Act 1997 is $5500 which is the acquisition price being
the first element of the cost base. The cost proceed in this case under section 116.20 of the