logo

TAXATION THEORY, PRACTICE & LAW TAXATION THEORY, PRACTICE & LAW TAXATION THEORY, PRACTICE & LAW

11 Pages3565 Words165 Views
   

Holmes Institute Sydney

   

HI6028 Taxation Theory, Practice & Law (HI6028)

   

Added on  2019-10-30

TAXATION THEORY, PRACTICE & LAW TAXATION THEORY, PRACTICE & LAW TAXATION THEORY, PRACTICE & LAW

   

Holmes Institute Sydney

   

HI6028 Taxation Theory, Practice & Law (HI6028)

   Added on 2019-10-30

ShareRelated Documents
Running head: TAXATION THEORY, PRACTICE & LAWTAXATION THEORY, PRACTICE & LAW
TAXATION THEORY, PRACTICE & LAW TAXATION THEORY, PRACTICE & LAW TAXATION THEORY, PRACTICE & LAW_1
TAXATION THEORY, PRACTICE & LAW2Table of contentsIntroduction......................................................................................................................................3Question 1........................................................................................................................................3Question 2........................................................................................................................................3Question 3........................................................................................................................................5Question 4........................................................................................................................................6Question 5........................................................................................................................................8Conclusion.......................................................................................................................................9References......................................................................................................................................10
TAXATION THEORY, PRACTICE & LAW TAXATION THEORY, PRACTICE & LAW TAXATION THEORY, PRACTICE & LAW_2
TAXATION THEORY, PRACTICE & LAW3IntroductionWith the help of the following assignment, the researcher has focused in the demonstration of legal as well as taxation system that is present is a specific nation. For this purposes, five different case studies have been taken into consideration. Another objective of this study is to know the implementation of laws and regulations related to taxation that are associated with the considered references by taking help from those provided by governmental bodies.Question 1Mr. Eric bought some shares along with some assets last year, which were again sold by him last week within same year. Any share or asset that is held by a person or some stakeholder for less than or equal to one year, is known to be a short-term asset. In the similar manner, any particular asset or share that exists under the ownership of a single person for more than 12 months, is supposed to be considered as a long-term asset. Hence, the assets those were purchased and sold by Mr. Eric in the same year will fall under the category of short term assets.Calculation of capital gain or loss due to short term assets for the last ended yearList of purchased shares and assets:List of shares and assets that were sold:Shares from listed organization for $ 6,000A flower vase of antique collection for $ 3,000Home theatre Sound system for $ 11,000A vintage chair worth $ 4,000A canvas painting worth $ 10,000Shares from listed organization for $ 21,000A flower vase of antique collection for $ 4,000Home theatre Sound system for $ 10,000A vintage chair worth $ 3,000A canvas painting worth $ 2,000Total assets purchased = $ 34,000Total assets sold = $ 39,000Capital gain due to Short term for the previously ended year = total value of assets sold - total value of assets purchased = $ 40,000 - $ 34,000 = $ 6,000Question 2This particular case reference is about Mr. Brian, who happens to be a bank executive and has received $ 1 million as loan at a discounted rate of 1%. The loan receiver also used 40% of the loan to meet all payment obligations for interest as well as for purposes related to income producing. For the year 2016-2017, Brian also received some fringe benefit on the amount that
TAXATION THEORY, PRACTICE & LAW TAXATION THEORY, PRACTICE & LAW TAXATION THEORY, PRACTICE & LAW_3
TAXATION THEORY, PRACTICE & LAW4he took for loan. Moreover, it has been clearly observed that Brian was provided with the loan on1st of April in 2016. Following is the calculations related to Brian’s taxable income for the year that has ended on 30 June 2017.Date when loan was received = 1st April 2016 (loan time = 3 years)Loan Amount = $ 1 millionInterest Rate on loan = 1% (fringe benefit or discounted interest rate)Actual interest rate on loans is nearly 15% all over the countryRepayment Mode for loan = per month installmentAmount of Loan used = $ 400,000 (40% of total loan that is $ 1 million)Calculation for 15 months installments = 15 months * (1% / 12 months * $ 1,000,000) = 15 months * ($ 10,000 / 12) = $ 12,500Calculation regarding income that is taxable for the year 2016-2017Total Income = $ 1,000,000Less: expenditures = $ 400,000Less: installments repayment in the form of interest = $ 10,000Less: installments repayment for principal = ($ 333,334 - $ 83,334) * $ 250,000Total taxable income = $ 340,000The tax has to be paid by Brian on taxable income of $ 340,000. This includes the monthly installment consisting interest and principal on loan which is ($ 10,000 + $ 250,000) $ 21,667. Therefore, it is observed that Brian needs to pay the reduced number of installments that is $ 21,667. On contrary to this, if Brian intends to pay the installment at the end of loan, there wouldbe a different taxable income (AbdulRazaq & Adam, 2015).Following is the Calculation.Total Income = $ 1,000,000Less: Expenditures = $ 400,000Total income that is taxable = $ 600,000Monthly repayment of all the installments seems to be a factor of benefit for Brian as the tax needs to be paid on $ 340,000. However, on contrary to this, the tax needs to be paid on a higher amount of $ 600,000 (Smith et al. 2016).
TAXATION THEORY, PRACTICE & LAW TAXATION THEORY, PRACTICE & LAW TAXATION THEORY, PRACTICE & LAW_4

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Taxation Laws And Principles | Taxation System Of Australia | Case Study
|11
|3557
|31

Report on Taxation Theory, Practice and Law
|8
|2436
|200

HI6028 :Taxation Theory, Practice and Law Assignment
|12
|3618
|312

Provisions available for the purpose by the law in Taxation Question 1 3
|8
|1476
|247

The Taxability Aspect of Capital Gains | Assignment
|7
|2220
|35

HI6028 - Taxation Theory, Practice & Law - Question Answers
|8
|2333
|57