Question 1
Issue
This case study demonstrates that famous mountaineer Hillary was an offer by a daily to publish her real life story, her life style and all of her achievements and the barriers on that and how she overcome that situation. They offered her an enormous amount of payment that is $10,000. She accepted that, and without anyone's helped, she wrote her life history by maintaining all the terms and conditions of the news paper Daily Terror (Chow, 2015). In fact, she accepted the amount also in return of her story. On the other hand, she sold her biography to the Mitchell Library and sold her mountain climbing photographs for $5,000 and $2,000 respectively. It was her personal income because the story was written only for her satisfaction and she sold them; then the main issue is what will be the taxation law for her this income.
Rule
According to the Australian income tax act of 1936 and the tax act of 1997 define the personal income law which includes the salary, pension, gratuities, fees, bonuses.
Application
As per the income tax law of Australia, the first income of Hillary from the daily terror is just an ordinary income, which is not considered as income tax. When Hillary sold her story and photographs in return of money then that falls under the capital gain tax law of Australia (Engdahl, 2011).
Conclusion
The incomes of her from all the three ways are considered as capital gain income because she wrote the story for own satisfaction.
Question 2
Issue
A mother had lent her son the amount of $40,000 as a home loan, and the son agreed to pay $50,000 after five years the deal happened without any written agreement, and the mother did not ask any security against the money. After two years the son becomes able to return the full money with 5% interest per year through check. Now in this situation, the issue is what will be the effect of the extra money earn by the mother (Horngren, 2014).
Rule
According to the taxation law of Australia the extra income of any person received by the person that is considered under the taxation law and is granted by the Constitution of Australia. This Australian constitution includes the salary of an individual, income from any investment, etc.
Application
In this case, the loan was not an investment for the mother because she just wants to help her son and she didn’t want any interest from her son. The amount of money which she was paid by her son was the 5% of $40,000 per year is $2,000 and $4,000 for two years (Jones, 2013). This income of her is not considered as ordinary income. This amount is less than that amount which is indicated by Australian taxation office.
Conclusion
The extra income of the mother has no effect on assessable income of the mother because the additional amount of money is not considered as an ordinary income and also under the limitation of the threshold of assessable income.
Question 3
a) In October 1980 in Brisbane, there was a vacant block of ground, so it is to the case study of the material it is shown by that accounting professional of the Scott had been purchased. So in that time of constructing the building of the house the costs of the land something, it stands for $90,000 and $60,000 for its construction (Lakshmanan, 2015).
Thus the property as long would be considered for the extended capital profitable. It was introduced in some of the year 1985, and that of the transactions levels does not pay to sufficient capital. To the point, Scott buys some empty land as per as cost as the given above, the total summative of the property in that some $150,000. After the area was constructed as a building was supposed to provide in that rent that was now considered as-as real income, then the property was sold at some of the sales of $80,000s (Liu and Liu, 2008). The person of that organization has paid to some of the profits that coming from of his sale of the asset, the tax gain of the capital do not to be applied capital profitable tax. So in the given case according to that Australian taxation law income comely some of them assets which are considered as some of the productive capital (Prince, 2012). So the property after constructing the houses they have to give some of the rent to generate in order from rent and considered as single income.
b) The house was sold at some of the effective capital tax by Scott, and it was applicable on some of the traded quantity. Profitable capital taxation is the demand on some tax amount charged that it is generated to some of the sale assets, that capital property includes some land, trademarks, building, etc. However, Scott had does not to wish the sell the land to his daughter. That capital taxation after the selling price of the land it would not be calculated because of the profitable capital taxation is not applicable to the property from thus of the exempted from that of the productive capital tax. So that the money gaining tax will not be summed up and that of the property would be the consideration as some of the gifts (Schroeder, Clark and Cathey, 2011).
c) The main reasons of that of the original estate company were the purchasing and gaining of some property in order of that single income, and it is the tax would fall under some simple income taxation. The effective capital tax considered some of the implemented of each of the each case. So the holder of the land in the company rather it is regarded as each, it differs little bit answer which seemed to be straight dependent on that type of that company discussed.
References
Chow, M. (2015). Australian master tax guide 2015. CCH Australia.
Engdahl, S. (2011). Taxation. Farmington Hills, MI: Greenhaven Press.
Horngren, C. (2014). Accounting. Toronto: Pearson Canada.
Jones, M. (2013). Accounting. Chichester: Wiley.
Lakshmanan, J. (2015). Taxation laws. [Place of publication not identified]: Universal Law Publishing.
Liu, Z. and Liu, T. (2008). 2008 latest PRC tax compliance. Beijing: Zhongguo cai zheng jing ji chu ban she.
Prince, J. (2012). Tax for Australians for dummies.
Schroeder, R., Clark, M. and Cathey, J. (2011). Financial accounting theory and analysis. Hoboken, NJ: Wiley.
