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Taxation Theory and Practice Assignment

   

Added on  2020-10-22

13 Pages3799 Words98 Views
TAXATION THEORY,PRACTICE

Table of ContentsINTRODUCTION...........................................................................................................................1QUESTION 1...................................................................................................................................1Evaluation of net Capital gain or loss for the Client...................................................................1Adjustment of capital loss...........................................................................................................7QUESTION 2...................................................................................................................................7a) Advise for assessment of Fringe benefit tax...........................................................................7CONCLSION...................................................................................................................................9REFERENCES..............................................................................................................................10

INTRODUCTIONAustralian Tax office is the main legislative authority that operate the revenue inAustralia. Rules, guidelines, statutory procedures and provisions are given related to assessmentof tax for individual, organisations and firms. Concept of taxable capital gain and losses subjectto different capital goods whether short term and long term purpose are defined in this report(Bjornlund, Wheeler and Rossini, 2013). In this report, tax liability is counted regarding variouscapital goods as block of land, antique bed, painting, shares, violin for short term and long termpurpose in first question. Assessment of Fringe benefit tax provided to employees evaluated inanother question. As a tax consultant in Mayfield, NSW legal solutions and provisions areadvised to clients.QUESTION 1Evaluation of net Capital gain or loss for the Clienta) Block of Vacant landAcquired vacant land for the purpose of investment and private and on this land calculatecapital gain tax for selling. But if purchase vacant of land for the use in a business or for profitmaking, that sales are treated as ordinary income. So that time need to register in goods andservice tax (GST). If buy vacant land for the purpose to build a rental property on it, so you areable for claim tax deductions for expenses obtain in keeping the land (Tran, 2015). If selling the land that was treated as trading stock and received assessable incomethrough sales proceeds. According to income tax purpose land may be treated as landingstock. And dealing of land for the business activity. And also resale the holding land.During deal we can including some business activities -◦For selling, developing and subdividing to acquire land◦Many purpose for acquiring land such as selling the developed property, building adwelling and commercial property.Land acquired on January 2001, for $100,000 and in local council, sewerage rates, waterand during ownership of the land taxes paid that all are incurred $20,000. she sell out this land on3 June, amount 320000 and she receive final amount on 3 January. According to section 104(35) of ITA act 1997 have contractual rights of assetsCost base Calculation on 3/061

Acquisition Cost of Vacant land100000Add Statutory Rates And taxes20000UN-indexed Cost Base 120000Calculation of Sale ProceedsParticularsAmountSale income from land320000Less Index Cost of acquisition120000Gain for next year200000Rendition: The sale of land is advised as capital gain tax event, and the asset capital gaintax covered by under section s 108-5 for the sale of land. In the contract selling amount of vacantland $320000 and paid sale price in next year related to case $20000. The total cost base is$120000. Calculating tax on the basis of these information -$100,000 this cost related to particular section under sec 110-25 (2)$20,000 this amount related to particular section of rate and land taxes under s 110-25(4)according to land acquire after 20 August 1991We getting taxable amount is $320000 - $120000 = $200000, under the section of capital gain115-25(1)b) Antique bedCalculation of index cost of bedParticularsAmountIndexation FactorNet AmountCost of acquisition of Antique bed35001.595565Add Index cost of improvementAdditions 15001.552319Indexed Cost Base50007884Index factor for cost of acquisition and cost of improvement as per Index reference base –2011–12Index valueYearCost of bed77.6Quarter ending September 1986Additional cost79.8Quarter ending December 1986Index when bed wasstolen123.4On September ending 1999Computation of taxable insurance claim2

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