Tax Avoidance and Australian Law
Added on 2020-04-01
10 Pages1955 Words170 Views
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Running head: TAXATION LAWTaxation Theory practice and LawName of the UniversityName of the StudentAuthors Note
1TAXATION LAWTable of ContentsAnswer to question 1:.................................................................................................................2Application of law:.....................................................................................................................2Answer to question 2:.................................................................................................................3Application of law:.....................................................................................................................3Answer to question 3..................................................................................................................4Application:................................................................................................................................5Answer to question 4:.................................................................................................................6Answer to question 5:.................................................................................................................6Applicable laws:.........................................................................................................................7References list:...........................................................................................................................8
2TAXATION LAWAnswer to question 1:Issue presented in this particular scenario is about determination of net capital loss orany net capital gain that would arise from selling of such assets. Laws that is applicable here is income tax assessment act, 1997 with the section 108-10 and section 108-20 of the ITTA Act. Under this section, any capital gain or losses thatarise from the personal use of assets are disregarded. Application of law:The loss that is generated from the disposal of selling off of the personal assets cannotbe considered for setting off purpose and they should be disregarded. In this scenario, sellingof home sound system has incurred a loss of $ 1000 and since it is a personal asset, it cannotbe considered for computation of net loss or gain. Disposal or selling of ordinary assets ofEric such as antique vase, antique chair, and painting has generated profit and there are notsuch any deductions prevailing in current year. Sale of shares has resulted in common gainsand total amount of loss incurred from selling the assets cannot be set off against such gaingenerated as per the section 108-10 of the ITAA 1997. Therefore, total amount of capital gainis computed to be at $ 15000.Asset DescriptionCost BaseCapital ProceedsCapital gainsCapial lossAntique Vase200030001000Antique Chair300010002000Painting 900010008000Home Sound System12000110001000Shares in listed company50002000015000Computation of net capital loss for the yearParticularsAmount ($)
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