Taxation

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

1TAXATION
Answer 1
Issue 1
The matter of concern in this given case is the result of the sale of painting by Helen under
CGT.
The transaction relating to the antique painting needs to be treated as a transaction involving
collectible as under s. 108.10 of the ITA Act 97 and will be subjected to taxation as CGT
asset. CGT gain as well as CGT loss as provided under s. 102.2 of the ITA Act 97, is required
to be escorted by a CGT event as enumerated under s. 104.5 of the ITA Act 97. The list of
CGT events provided under s. 104.10 of the ITA Act 97 requires any CGT event that
involves the sale of a CGT asset with a view to dispose it off permanently to be treated as an
A1 category of CGT event. The time of acquisition of a CGT asset by the holder of the same
is the time when the ownership of the asset has been conferred upon that holder as can be
conceived from s. 109.5 of the ITA Act 97 (Barkoczy 2016).
The exact timing at which the ownership of the painting has been conferred upon Helen is not
what made clear with the facts of the case. The reason behind such an ambiguity is the fact
that the painting has been purchased by her father. Another factor that needs to be considered
is the timing at which the painting has been purchased. For being subjected to CGT the asset
needs to be purchased on a date after or on 20-09-1985 as any asset purchased in that
prescribed date will be treated as a CGT asset. The loss or gain arising out of such a CGT
event will be required to be computed by subtracting the lower of the cost proceed and cost
base from the other one. In this case the cost base will be $4000, which depicts the first
element of the cost base. Being purchased by her father the painting has came to the
possession of Helen either by succession or by gift. This will require the cost base to be
adjusted with the market value of the existing situation during the acquisition of the same.

2TAXATION
The capital proceed gathered amounted to $12,000. Being held for more than 1 year a 50%
discount will also be allowed under div 115.
Issue 2
The matter of concern in this given case is the result of the sale of historical sculpture by
Helen under CGT.
The transaction relating to the historical sculpture needs to be treated as a transaction
involving collectible as under s. 108.10 of the ITA Act 97 and will be subjected to taxation as
CGT asset. CGT gain as well as CGT loss as provided under s. 102.2 of the ITA Act 97, is
required to be escorted by a CGT event as enumerated under s. 104.5 of the ITA Act 97. The
list of CGT events provided under s. 104.10 of the ITA Act 97 requires any CGT event that
involves the sale of a CGT asset with a view to dispose it off permanently to be treated as an
A1 category of CGT event. The time of acquisition of a CGT asset by the holder of the same
is the time when the ownership of the asset has been conferred upon that holder as can be
conceived from s. 109.5 of the ITA Act 97 (Barkoczy 2016).
The sculpture has been purchased by Helen on the month of December in the year 1993. For
being subjected to CGT the asset needs to be purchased on a date after or on 20-09-1985 as
any asset purchased in that prescribed date will be treated as a CGT asset. The loss or gain
arising out of such a CGT event will be required to be computed by subtracting the lower of
the cost proceed and cost base from the other one. In this case the cost base will be $5500,
which depicts the first element of the cost base. The capital proceed gathered amounted to
$6000. There will be a CGT gain of $500. Being held for more than 1 year a 50% discount
will also be allowed under div 115.
Issue 3