Taxation Law Assignment - Workpapers, Capital Gains, Rental Property

This taxation law assignment examines various aspects of taxation, including income-related work, capital gains, and rental property. The assignment includes detailed workpapers, calculations of capital gains tax (CGT) based on share transactions, and a rental property schedule with income and expense breakdowns. It also features a depreciation worksheet for different assets. The analysis incorporates relevant legal references and rulings, such as the taxation ruling of 95/35 concerning CGT compensation. The assignment provides a comprehensive overview of tax calculations, including the determination of taxable income, capital gains, and depreciation, along with relevant legal and accounting principles.

1TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID
TABLE OF CONTENT

0TAXATION LAW
S
1. workpapers..........................................................................................................................1
Income Related to Work............................................................................................................1
Capital Gains..........................................................................................................................1
Rental Property.......................................................................................................................8
Tax payable, offsets and Levies.............................................................................................9
Depreciation Worksheet.........................................................................................................9
Reference and bibiliography:...................................................................................................11

1TAXATION LAW
1. WORKPAPERS
INCOME RELATED TO WORK
Particulars Amount in ($)
Earnings of Spouse $64000
Compensation from Medical expenditure $8000
Superannuation $10000
Total $82000
Expenses that are related to work is viewed as the taxable income of the taxpayer
during the particular assessment year for the year ended 2017. The three elements that are
taken into the considerations in determining the income are the income of the spouse derived
as wages and salary, compensation from medical expenses and superannuation contribution
that is made by the employer as the part of the salary sacrifice value (Barkoczy, 2016). These
three elements are regarded as the taxable income since the salary of the spouse is considered
to be assessable in the hands of husband. Additionally, other expenses such as medical
expenditure, compensation for medical expenditure and superannuation would be considered
in determining the assessable income (Tan et al., 2016).
The employment income is regarded as the major source of revenue that is derived by
the individual in the given period of time so that the taxpayer can boost their present position.
Capital Gains
Capital Gains Worksheet2017
Description
BHP % 100 SHARES -
AUST
Acquisition:
01-06-2016 BHP
shares 2,500 12,500 2 1 12,50
0
Disposal:
01-12-2016 2,500 50,925
Cost base 12,500 Frozen 12,500
- Allowable deductions
1

2TAXATION LAW
+ Assessable income on disposal
Assessable Amount
Reduced cost base 0 Gain
Discountable (Individual - subject to
discount) 38,425 /
Frozen Indexation 38,425 /
% 100 SHARES -
AUST
Acquisition:
01-01-2016 CBA 2,000 10,800 2 1 10,80
0
Disposal:
01-12-2016 2,000 #######
Cost base 10,800 Frozen 10,800
- Allowable deductions
+ Assessable income on disposal
Assessable Amount
Reduced cost base 0 Gain
Discountable (Individual - subject to
discount) ####### /
Frozen Indexation ####### /
COH % 100 SHARES -
AUST
Acquisition:
01-01-2016 COH 1,000 2,900 2 1 2,900
Disposal:
01-12-2016 1,000 #######
Cost base 2,900 Frozen 2,900
- Allowable deductions
2

3TAXATION LAW
+ Assessable income on disposal
Assessable Amount
Reduced cost base 0 Gain
Discountable (Individual - subject to
discount) ####### /
Frozen Indexation ####### /
FLT % 100 SHARES -
AUST
Acquisition :
01-01-2016 FLT 1,000 950 2 1 950
Disposal:
01-12-2016 1,000 32,290
Cost base 950 Frozen 950
- Allowable deductions
+ Assessable income on disposal
Assessable Amount
Reduced cost base 0 Gain
Discountable (Individual - subject to
discount) 31,340 /
Frozen Indexation 31,340 /
MYR % 100 SHARES -
AUST
Acquisition:
01-01-2016 MYR 10,000 41,000 2 1 41,00
0
Disposal:
01-12-2016 10,000 12,100
Cost base 41,000 Frozen 41,000
- Allowable deductions
3

4TAXATION LAW
+ Assessable income on disposal
Assessable Amount
Reduced cost base 0 Gain
Discountable (Individual - subject to
discount) 0 /
Frozen Indexation 0 /
% 100 SHARES -
AUST
Acquisition:
01-01-2016 TLS 2,000 6,600 2 1 6,600
Disposal:
01-12-2016 2,000 11,500
Cost base 6,600 Frozen 6,600
- Allowable deductions
+ Assessable income on disposal
Assessable Amount
Reduced cost base 0 Gain
Discountable (Individual - subject to
discount) 4,900 /
Frozen Indexation
4,900 /
CAPITAL GAINS TAX (CGT) SCHEDULE 2017
Capital Gains Tax Schedule 2017
Tax file number (TFN) 881156217
4

5TAXATION LAW
Taxpayer's name Mr Donald Jensen
Australian Business 84 111 122 223
Number (ABN)
1 Current year capital gains
and capital losses
Capital gain Capital loss
Shares in companies listed on A $ 3,37
,615 K
an Australian securities exchange
Other shares B $ L $
Units in unit trusts listed on C $ M $
an Australian securities exchange
Other units D $ N $
Real estate situated in Australia E $ O $
Other real estate F $ P $
Amount of capital gains from a trust G $
(Including a managed fund)
Collectables H $ Q $
Other CGT assets and any I $ R $
Other CGT events
Total current year Add the amounts at labels K to
R and write
Capital gains J $ 3,37
,615
the total in item 2 label A -
Total current year
capital losses.
5

6TAXATION LAW
2 Capital losses
Total current year capital losses A $ 0
Total current year net capital losses applied B $ 0
Total prior year net capital losses applied C $ 0
Total capital losses transferred in applied
(only for transfers involving a foreign bank
branch or permanent D $
establishment of a foreign financial entity)
Total capital losses applied E $
Add amounts at B, C and D.
3 Unapplied net capital
losses carried forward
Net capital losses from collectables carried
forward to later income years A $
6

7TAXATION LAW
Other net capital losses carried forward to
later income years B $
Add amounts at A and B and transfer the
total
to label V - Net capital losses carried
forward
to later income years on your tax return.
4 CGT discount
Total CGT discount applied A $ 0
6 Net capital gain
Net capital gain A $ 3,37
,615
1J less 2E less 4A less 5D (cannot be less
than
zero). Transfer the amount at A to label A -
Net
capital gain on your tax return.
As stated under the “taxation ruling of 95/35” any form of capital gains that is made
under this ruling would be considered as the capital gains tax (Saad 2014). The ruling is
specifically concerned with the CGT consequences for the receipt of compensation amount.
Under this ruling any form of compensation that is received by the taxpayer that is entirely in
7

8TAXATION LAW
respect of the sale of underlying assets or of the taxpayer’s compensations it would be
considered as the considerations received for the disposal of the asset.
The compensation that is received by the taxpayer from the proceeds of the sale of
property or any money arising out of the numerous options namely the underlying assets,
revenue derived from the proceedings of the court and dissected assets would be regarded as
compensation (Braithwaite, 2017). As evident from the present situation it can be stated that
transfer of share on the part of taxpayer arising out of the death of the shareholder would be
considered as real owner of the asset.
Shares that are held in six different organizations namely in CBA, BHP, COH, MYR
and TLS whose sales proceeds would be determined based on the selling price and the
present market value reported by the taxpayer on the event of death (Bevacqua, 2015). Citing
the reference of “Inspector of Taxes v. Bensons Hosiery (Holdings) Pty ltd” the court have
stated their decision by stating that any legal enforceable rights can be turned into the account
of the asset for the purpose of CGT legislation (Miller and Oats 2016).
Rental Property
Rental Property Schedule for 2017
Address of Rental Property 4/285 Pacific
parade
Bilinga QLD 4225
Date property first earned rental income 01-03-2017
Number of weeks property was rented this year 40
Private Use %
Ownership % owned
Jensen Donald Jen000
1 100
Income Return
Gross rental income 400 400
Other rental related income
Gross Rent 400 400
Expenses Total Prv % Return
S Stationery, telephone and postage JEN0001 17,195 17,19
5
N Legal fees JEN0001 1,240 1,240
8

9TAXATION LAW
E Body corporate fees JEN0001 1,000 1,000
H Council Rates JEN0001 900 900
U Water charges JEN0001 350 350
K Insurance JEN0001 685 685
L Interest on loans JEN0001 7,600 7,600
Q Repairs and maintenance JEN0001 699 699
Total expenses 29,669 29,669
Net Rent 29,269 / L 29,26
9
Tax payable, offsets and Levies
Individual Tax Offsets-2017
Taxpayer Spouse
Taxable Income 0 64,000
Adjusted Reportable Fringe Benefits 605 0
Reportable Super Contributions 10,000 0
Exempt Pensions or benefits 0 0
Target Foreign Income 0 0
Net Financial Investment Losses and Rental Property
Losses 1,46,226 0
Less - Child Maintenance expenditure 0 0
Adjusted Taxable Income 1,56,831 64,000
Depreciation Worksheet
WORKSHEET OF DEPRECIATION-2017
Title Buildi
ng
Transfer to
9

10TAXATION LAW
Private Use %
(default
private
use % for
this
workshe
et)
Instant
Asset
Write-Off
01-01-2017 Building 1,40,0
00
01-01-2017 Stove 750
01-01-2017 Hot Water
system 850
01-01-2017 Carpet 3,750
01-01-2017 Dishwashe
r 700
01-01-2017 AC 1,200
01-01-2017 Window
curtains 2,700
01-01-2017 Refrigera
tor 990
01-01-2017 Washing
machine 1,800
Total 1,52,7
40
Depreciation represents the wear and tear of the obsoleteness of the asset where the
non-current transaction is recorded in the books of accounts of the individual taxpayer. The
total amount of depreciation represents the cost of all the assets (Hopkins, 2016). Instant
write off method has been used by the individual in ascertaining the total quantity of
depreciation that is deducted from the total amount tax liabilities that is occurred during the
year.
10