University Taxation Assignment: Analysis of Tax Issues

This document provides a comprehensive analysis of several taxation scenarios. It begins by addressing whether a taxpayer can offset capital losses against gains based on Section 108-10 of the ITAA 1997, concluding that losses from personal assets cannot be offset. The assignment then explores the calculation of Fringe Benefit Tax (FBT) according to the Fringe Benefit Tax Act 1986 and relevant taxation rulings, determining that, in the given scenario, no FBT is payable. Furthermore, the assignment examines loss distribution in joint ownership of rental properties, applying relevant laws and rulings to determine how losses should be shared. The document also discusses tax avoidance, referencing IRC v Duke of Westminster (1936). Finally, it analyzes the taxation of timber cutting, referencing Subsection 6 (1) of the ITAA 1936 and concluding that the income received from timber sales is taxable. The analysis is supported by references to relevant legal and academic sources.

Running head: TAXATION
Taxation
Name of Student:
Name of University:
Author’s Note:

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Answer 1:
Issue:
The issue related to the matter is basically if the taxpayer can measure the amount which
is retained form the capital loss or the gains that can be considered due to the set off based on
Section 108-10 of the ITAA 1997.
Rules:
The rules are Section 108-20 of the ITAA 1997 and Section 108-10 of ITAA 1997.
Application:

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Application:
The situation currently is related to the taxpayer which mentions the sustained loss from
the sale of the sound system and is\t is impossible for the approval for set off purposes. This is
because, it has a feature of personal asset not allowed for the purpose of set off.
The profits which Eric obtained on that day of the sales, were those of ordinary assets and
did not have any type of existent capital for the years or any other type of reductions as well. The
section 108-10 of the ITAA 1997 was followed which helped in evidence regarding the loss of
the collectables are not possible for consideration related to the set off against the ordinary gains.
These are from the sales shares which are not allowed for the set off purposes (Althaus,
Bridgman and Davis 2012).
Conclusion:
Based on the conversation it has been seen that Eric cannot possibly set off the sustained
loss from the collectables that were primarily derived by him as revenue upon the sales of the
ordinary assets.
Answer 2:
Issue:
The particular scenario concerned puts forward the situation dealing with the concept of
the calculation process of the FBT which has been defined based on the the Fringe benefit Act of
1986.

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Laws:
The laws are Fringe Benefit Tax Act 1986 and Taxation Rulings TR 93/6.
Application:
Computation of Fringe Benefit Tax
Application:
The customers are provided with the possibility of thee rulings in situations when the
profit incurred in cases when tax payment of any kind for such a sort of income is not required.
Based on the Taxation Rulings of the TR 93/6, Brian need not pay the tax based on this situation
in case the bank discharges him (Kennya 2016).

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Based on the guidelines of the Taxation Rulings of the TR 93/6, plans are made by banks
or other loan making companies. This is done to provide people with opportunities for the
interest offset of the customers (Devos 2012).
Conclusion:
It can be concluded from the above scenario that no amount needs to be paid to the bank
as income tax. This is due to the fact that the loan interest is payable at the end of the loan.
Answer 3:
Issue:
The concerned matter is related to the loss distribution sustained by the taxpayers in the
context mentioned concerned with the joint ownership as also the rental property (Deegan 2012).
Laws:
The laws are FC of T v McDonald, Section 51 of the ITAA 1997 and Taxation ruling TR
93/23.
Application:
In the concerned scenario, Jack and Jill are being examined as an evaluation based on the
properties assessable property rented by them. In the scenario concerned, Jack will be eligible for
10% and Jill for 90% of the profits. It is to be understood that the joint ownership of the income
will not be accounted for the partnership reasons. This is regarding the principles of the general
law clarifiable form Jack and Jill scenario (Barkoczy 2016).

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The guidelines related to the division of the income are in compliance with the Taxation
Ruling TR 93/32 and are mentioned with respect to any kind of loss related to the joint property
owners (Whait, 2012).
The Taxation ruling TR 92/32 principles clearly state that, the joint ownership is not
possible to be treated as a sort of partnership. In this scenario, Mrs Mc Donald should receive
around 75% of the total profit on the property and her husband is entitled to 25% of it. This is
due to the income of Mrs Mc Donald. In a similar nature, the situation at present would not be
considered as a partnership under the general forms of law that arise out of property to be shared.
Conclusion:
The scenario related discussion clearly states that Jack and Jill are required to share the
loss in equal proportion as their joint ownership will not be treated as a partnership.
Answer 4:
It is known that the gardener was paid by Duke on a per week basis and the entering of
the contract by him led to the payment of the equivalent amount in connection to the covenant
agreement. IRC v Duke Westminster (1936) is concerned with the consideration of the tax
avoidance.
The said benefit was received by Duke as the liability was lowered by the covenant
regarding the liability of the Duke to surtax. The case clearly explains that every person is
allowed to order the tax affairs relate to the objective of the tax assessment.
Under the fiscal framework, every individual is given the hence to reduce their tax
liability.

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Answer 5:
Issue:
The issue at present is related to the cut down of timber in compliance with the
subsection 6 (1) of the ITAA 1997.
Rules:
The laws are Subsection 6 (1) of the ITAA 1936 and McCauley v FC of T.
Application:
Based on the current issue of Bill, it is clear that the ownership of the land possessing
several pine trees belongs to him. He agreed to pay $1000 for every 100 meter of timber that the
logging firm can take from Bill’s land. It is also applicable for those people who indulge in the
forestry activities and also according to the explanation of the Subsection 6 (1) of the ITAA
1936, any individual having connections with the forest operations will be considered as a major
producer for the income tax.
According to the above context it can be said that Bill did not plant the trees, however the
amount which is received for the sale of the felled timber would be thought for the correct form
of assessment.
Conclusion:
Depending on the above analysis, the amount received by Bill for the timber tending
would be thought of as taxable income and in alternative scenarios in case a lump sum is
received, it would be treated as a royalty.

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References:
Althaus, C., Bridgman, P. and Davis, G., 2012. The Australian policy handbook. Allen & Unwin.
Barkoczy, S., 2016. Foundations of Taxation Law 2016. OUP Catalogue.
Deegan, C., 2012. Australian financial accounting. McGraw-Hill Education Australia.
Devos, K., 2012. The impact of tax professionals upon the compliance behaviour of Australian
individual taxpayers. Revenue Law Journal, 22(1), p.31.
Kennya, P., 2016. Small business capital gains tax concessions: The case for reform.
Whait, R.B., 2012. Developing risk management strategies in tax administration: the evolution of
the Australian Taxation Office's compliance model. eJournal of Tax Research, 10(2), p.436.