Taxation
Added on 2023-03-23
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Running head: TAXATION
Taxation
Name of the Student
Name of the University
Author Note
Taxation
Name of the Student
Name of the University
Author Note
1TAXATION
Question 1
In the given instance Helen has been desiring of starting a business of fashion designing. For
the purpose of starting that business she needed funds and to gather such funds she sold some
of the properties. This properties accrued certain gains to Helen in that year of income. The
analysis of each of such transactions involving sale of Helen’s property can be made in the
following way.
The first sale made by Helen was that of a painting that her father what for $4000 in February
of the year 1985. It has been stated u/s 102.20 belonging to the ITAA 97 CGT loss or gain
happens with the happening of a CGT event. A CGT event needs to be accompanied by an
operation which has involved in it a CGT asset. CGT asset needs to be assessed under the
concepts of pre-CGT and post-CGT. Any CGT asset, which has been purchased by a person
prior to the introduction of the CGT regime that is 20/09/85, is required to be excluded from
being rendered as a CGT asset and the event involving the same to accrue CGT gain. These
are called pre-CGT assets. Any asset purchased afterwards will be termed as post-CGT asset
and the event relating to the same will be treated under the CGT regime. The gain or loss that
is accrued to a person by virtue of a sale of an asset that comes under the CGT cover will be
categorised as A1 CGT event. The painting bought by Helen’s father has been actors before
the introduction of CGT and hence is to be treated as a pre-CGT asset. Although it has been
bought for $4000 and sold for $12,000 and the same has been affected in 2018, the same
cannot be included in the calculation of CGT. Therefore it can be stated that this particular
transaction is required to be excluded or exemption while computing CGT liability.
The second sale meet by Helen was that of a historical sculpture purchased on December
1993 for $5,500 for a price of $6000 on January 2018. Is it on that has been defined in section
108. 10(2) of the Act as a commodity that a person possesses for the purpose of personal
Question 1
In the given instance Helen has been desiring of starting a business of fashion designing. For
the purpose of starting that business she needed funds and to gather such funds she sold some
of the properties. This properties accrued certain gains to Helen in that year of income. The
analysis of each of such transactions involving sale of Helen’s property can be made in the
following way.
The first sale made by Helen was that of a painting that her father what for $4000 in February
of the year 1985. It has been stated u/s 102.20 belonging to the ITAA 97 CGT loss or gain
happens with the happening of a CGT event. A CGT event needs to be accompanied by an
operation which has involved in it a CGT asset. CGT asset needs to be assessed under the
concepts of pre-CGT and post-CGT. Any CGT asset, which has been purchased by a person
prior to the introduction of the CGT regime that is 20/09/85, is required to be excluded from
being rendered as a CGT asset and the event involving the same to accrue CGT gain. These
are called pre-CGT assets. Any asset purchased afterwards will be termed as post-CGT asset
and the event relating to the same will be treated under the CGT regime. The gain or loss that
is accrued to a person by virtue of a sale of an asset that comes under the CGT cover will be
categorised as A1 CGT event. The painting bought by Helen’s father has been actors before
the introduction of CGT and hence is to be treated as a pre-CGT asset. Although it has been
bought for $4000 and sold for $12,000 and the same has been affected in 2018, the same
cannot be included in the calculation of CGT. Therefore it can be stated that this particular
transaction is required to be excluded or exemption while computing CGT liability.
The second sale meet by Helen was that of a historical sculpture purchased on December
1993 for $5,500 for a price of $6000 on January 2018. Is it on that has been defined in section
108. 10(2) of the Act as a commodity that a person possesses for the purpose of personal
2TAXATION
enjoyment and personal usage. Such a commodity will include an artwork, a piece of
jewellery, a rare folio, antique object or any other object of similar nature. To be permitted in
the assessment of CGT, transaction relating to collectible requires the collectible to be both
more than $500 as provided under section 118.10 (1) of the Act. Any transaction relating to a
collectible that has a worth under the mention limit will be allowed as an exemption under
section 110.10 of the Act. The historical sculpture has been sold for 6000 dollars is to be
treated as a Capital asset. This is because it has been purchased after the introduction of CGT.
It is a collectible as the meaning provided under section 108. 10 (2). Moreover as provided
under section 118 .10(1) the collectible is worth above the threshold of $500. This needed the
seal relating to the collectible to be assessed under the CGT liability assessment.
The third sale made by Helen was that of an antique jewellery that she bought on October of
1987 and sold on March of 2018. The jewellery has been bought for $14,000 but the sale has
been made for $13,000. Any loss or profit relating to a collectible above the price of $500 is
required to be treated as CGT profit or loss. But while treating a CGT loss arising from a
collectible the same needs to be allowed as a offset but such an allowance needs to be
permitted only with respect to another collectible gain provided under section 108.10. No
other CGT gain can claim such a loss to be treated as an offset. In the present case the
jewellery has been sold causing a loss of $1000 to Helen. Jewellery being collectible needs to
be treated as a CGT asset and is required to be treated as an offset. However as it is a
collectible the same is required to be treated as an offset with respect to a collectible only. In
the given set of circumstances the only collectible that can be found to be have transacted is
the historical sculpture. Hence, the loss from the jewellery is required to be treated as an
offset in the gain derived from the historical sculpture.
The third seal made by Helen is that of a picture that has been bought on March of the year
1987 and sold on July of the year 2018. The acquisition cost was $470 but the sale price was
enjoyment and personal usage. Such a commodity will include an artwork, a piece of
jewellery, a rare folio, antique object or any other object of similar nature. To be permitted in
the assessment of CGT, transaction relating to collectible requires the collectible to be both
more than $500 as provided under section 118.10 (1) of the Act. Any transaction relating to a
collectible that has a worth under the mention limit will be allowed as an exemption under
section 110.10 of the Act. The historical sculpture has been sold for 6000 dollars is to be
treated as a Capital asset. This is because it has been purchased after the introduction of CGT.
It is a collectible as the meaning provided under section 108. 10 (2). Moreover as provided
under section 118 .10(1) the collectible is worth above the threshold of $500. This needed the
seal relating to the collectible to be assessed under the CGT liability assessment.
The third sale made by Helen was that of an antique jewellery that she bought on October of
1987 and sold on March of 2018. The jewellery has been bought for $14,000 but the sale has
been made for $13,000. Any loss or profit relating to a collectible above the price of $500 is
required to be treated as CGT profit or loss. But while treating a CGT loss arising from a
collectible the same needs to be allowed as a offset but such an allowance needs to be
permitted only with respect to another collectible gain provided under section 108.10. No
other CGT gain can claim such a loss to be treated as an offset. In the present case the
jewellery has been sold causing a loss of $1000 to Helen. Jewellery being collectible needs to
be treated as a CGT asset and is required to be treated as an offset. However as it is a
collectible the same is required to be treated as an offset with respect to a collectible only. In
the given set of circumstances the only collectible that can be found to be have transacted is
the historical sculpture. Hence, the loss from the jewellery is required to be treated as an
offset in the gain derived from the historical sculpture.
The third seal made by Helen is that of a picture that has been bought on March of the year
1987 and sold on July of the year 2018. The acquisition cost was $470 but the sale price was
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