Taxation

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

1TAXATION
Answer 1
A.
The capital game tax consequences arising from the deal relating to the selling of the antique
painting as made by Helen.
The deal involving the selling of the painting as provided in this case will need to be
subjected to assessment for taxation in the form of a collectible that can be rendered as a
CGT asset u/s 108-10 of the Income Tax Assessment Act 1997. The loss as well as the gain
of capital nature that accrues in a particular transaction u/s 102-10 of the Act needs to
supplemented by capital gain event u/s 104-5 of the Act. The various categories of capital
gain events as enumerated u/s 104-5 of the Act points towards the sale of an asset to be
categorised as an A1 category of capital gain event. The effective timing as to the acquisition
of a Capital asset will be assessed as to the conferring of ownership upon the taxpayer with
respect to the asset u/s 109-5 of the Act.
The facts of this case does not provide any express mention of the effective timing of
acquisition of the painting as made by Helen. This anomaly regarding the effective time is
required to be assessed backed with the fact that the painting has actually been purchased by
Helen’s father. The assessment of the painting as a Capital asset will only be allowed if the
acquisition of the painting by Helen has been affected after the date of 20-09-1985. The asset
of capital nature will not be included in the assessment of CGT liability even if it can be
made if evident that the purchase of the same has been affected prior to the prescribed date.
Being acquired a subsequent date the painting will be brought under the category of CGT
assets and will be treated as collectibles. The capital gain or loss arising from the sale will be
computed by deducting the lower of the cost precede and the cost base from the other one. In
the present situation the cost base is $4,000. As the acquisition of the painting was made by

2TAXATION
Helen by succession or by death the item being actually purchased by her father the cost of
acquisition needs to be subjected to the market value existing at that time. However the
capital proceed totalling up to 12000 dollars. Being held for more than 1 year a 50% discount
will be available.
B.
The capital game tax consequences arising from the deal relating to the selling of the
historical sculpture as made by Helen.
The deal involving the selling of the sculpture as provided in this case will need to be
subjected to assessment for taxation in the form of a collectible that can be rendered as a
CGT asset u/s 108-10 of the Income Tax Assessment Act 1997. The loss as well as the gain
of capital nature that accrues in a particular transaction u/s 102-10 of the Act needs to
supplemented by capital gain event u/s 104-5 of the Act. The various categories of capital
gain events as enumerated u/s 104-5 of the Act points towards the sale of an asset to be
categorised as an A1 category of capital gain event. The effective timing as to the acquisition
of a Capital asset will be assessed as to the conferring of ownership upon the taxpayer with
respect to the asset u/s 109-5 of the Act.
The sculpture has when purchased by Helen on the date of December 1993. The assessment
of the sculpture as a Capital asset will only be allowed if the acquisition of the sculpture by
Helen has been affected after the date of 20-09-1985. The asset of capital nature will not be
included in the assessment of CGT liability even if it can be made if evident that the purchase
of the same has been affected prior to the prescribed date. Being acquired a subsequent date
the sculpture will be brought under the category of CGT assets and will be treated as
collectibles. The capital gain or loss arising from the sale will be computed by deducting the
lower of the cost precede and the cost base from the other one. In the present situation the