You are working as a tax consultant in Mayfield, NSW. Your client is an investor and antique collector. You have ascertained that she is not carrying on a business. Your client provides the following information of sales of various assets during the current tax year:
(a) Block of vacant land. On 3 June of the current tax year your client signed a contract to sell a block of vacant land for $320,000. She acquired this land in January 2001 for $100,000 and incurred $20,000 in local council, water and sewerage rates and land taxes during her period of ownership of the land. The contract of sale stipulates that a deposit of $20,000 is payable to her when the contract of sale is signed and the balance is payable on 3 January of the next tax year, when the change of ownership will be registered.
(b) Antique bed. On 12 November of the current tax year your client had an antique four-poster Louis XIV bed stolen from her house. She recently had the bed valued for insurance purposes and the market value at 31 October of the current tax year was $25,000. She purchased the bed for $3,500 on 21 July 1986. Although the furniture was in very good condition, the bed needed alterations to allow for the installation of an innerspring mattress. These alterations significantly increased the value of the bed, and cost $1,500. She paid for the alterations on 29 October 1986. On 13 November of the current tax year she lodged a claim with her insurance company seeking to recover her loss. On 16 January of the current tax year her insurance company advised her that the antique bed had not been a specified item on her insurance policy. Therefore, the maximum amount she would be paid under her household contents policy was $11,000. This amount was paid to her on 21 January of the current tax year.
(c) Painting. Your client acquired a painting by a well-known Australian artist on 2 May 1985 for $2,000. The painting had significantly risen in value due to the death of the artist. She sold the painting for $125,000 at an art auction on 3 April of the current tax year.
(d) Shares. Your client has a substantial share portfolio which she has acquired over many years. She sold the following shares in the relevant year of income:
(i) 1,000 Common Bank Ltd shares acquired in 2001 for $15 per share and sold on 4 July of the current tax year for $47 per share. She incurred $550 in brokerage fees on the sale and $750 in stamp duty costs on purchase.
(ii) 2,500 shares in PHB Iron Ore Ltd. These shares were also acquired in 2001 for $12 per share and sold on 14 February of the current tax year for $25 per share. She incurred $1,000 in brokerage fees on the sale and $1,500 in stamp duty costs on purchase
(iii) 1,200 shares in Young Kids Learning Ltd. These shares were acquired in 2005 for $5 per share and sold on 14 February of the current tax year for $0.50 per share. She incurred $100 in brokerage fees on the sale and $500 in stamp duty costs on purchase.
(iv) 10,000 shares in Share Build Ltd. These shares were acquired on 5 July of the current tax year for $1 per share and sold on 22 January of the current tax year for $2.50 per share. She incurred $900 in brokerage fees on the sale and $1,100 in stamp duty costs on purchase.
(e) Violin. Your client also has an interest in collecting musical instruments. She plays the violin very well and has several violins in her collection, all of which she plays on
a regular basis. On 1 May of the current tax year she sold one of these violins for $12,000 to neighbour who is in the Queensland Symphony Orchestra. The violin cost her $5,500 when she acquired it on 1 June 1999. Your client also has a total of $8,500 in capital losses carried forward from the previous tax year, $1,500 of which are attributable to a loss on the sale of a piece of sculpture which she sold in April of the previous year.
Required: Based on this information, determine your client’s net capital gain or net capital loss for the year ended 30 June of the current tax year.
Rapid-Heat Pty Ltd (Rapid-Heat) is an Electric Heaters manufacturer which sells Electric Heaters directly to the public. On 1 May 2017, Rapid-Heat provided one of its employees; Jasmine, with a car as Jasmine does a lot of travelling for work purposes. However, Jasmine's usage of the car is not restricted to work only. Rapid-Heat purchased the car on that date for $33,000 (including GST).
For the period 1 May 2017 to 31 March 2018, Jasmine travelled 10,000 km in the car and incurred expenses of $550 (including GST) on minor repairs that have been reimbursed by Rapid-Heat. The car was not used for 10 days when Jasmine was interstate and the car was parked at the airport and for another five days when the car was scheduled for annual repairs.
On 1 September 2017, Rapid-Heat provided Jasmine with a loan of $500,000 at an interest rate of 4.25%. Jasmine used $450,000 of the loan to purchase a holiday home and lent the remaining $50,000 to her husband (interest free) to purchase shares in Telstra. Interest on a loan to purchase private assets is not deductible while interest on a loan to purchase income-producing assets is deductible.
During the year, Jasmine purchased an Electric Heaters manufactured by Rapid-Heat for $1,300. The Electric Heaters only cost Rapid-Heat $700 to manufacture and is sold to the general public for $2,600.
(a) Advise Rapid-Heat of its FBT consequences arising out of the above information, including calculation of any FBT liability, for the year ending 31 March 2018. You may assume that Rapid-Heat would be entitled to input tax credits in relation to any GSTinclusive acquisitions.
(b) How would your answer to (a) differ if Jasmine used the $50,000 to purchase the shares herself, instead of lending it to her husband?
To export a reference to this article please select a referencing stye below:
My Assignment Help. (2021). Taxation Theory Practice And Law. Retrieved from https://myassignmenthelp.com/free-samples/hi6028-taxation-theory-practice-and-law/determine-the-total-capital-gains-or-loss.html.
"Taxation Theory Practice And Law." My Assignment Help, 2021, https://myassignmenthelp.com/free-samples/hi6028-taxation-theory-practice-and-law/determine-the-total-capital-gains-or-loss.html.
My Assignment Help (2021) Taxation Theory Practice And Law [Online]. Available from: https://myassignmenthelp.com/free-samples/hi6028-taxation-theory-practice-and-law/determine-the-total-capital-gains-or-loss.html
[Accessed 10 April 2021].
My Assignment Help. 'Taxation Theory Practice And Law' (My Assignment Help, 2021) <https://myassignmenthelp.com/free-samples/hi6028-taxation-theory-practice-and-law/determine-the-total-capital-gains-or-loss.html> accessed 10 April 2021.
My Assignment Help. Taxation Theory Practice And Law [Internet]. My Assignment Help. 2021 [cited 10 April 2021]. Available from: https://myassignmenthelp.com/free-samples/hi6028-taxation-theory-practice-and-law/determine-the-total-capital-gains-or-loss.html.
Our specially curated generators have been revolutionary in helping the students cite resources (books, online articles, journals, websites, etc.). You have to visit our site and provide the details related to the resource. If you have Chicago referencing style requirements, Chicago reference generator will provide you with the final layout. Similarly, the Vancouver reference generator or Harvard reference generator will yield corresponding results. Thus, your issues with referencing style are permanently resolved. The reference generator related to APA is ideal for APA referencing assignments. Furthermore, you get the results instantly without you having to wait for delayed outputs.
Answer 1. (a) FBT consequences FBT consequences will be imposed on employer and not on the employee when the employer has issued fringe benefits to employee. The potential taxation consequences are specified in “Fringe Benefits Tax Assessment Act 1986 or FBTAA 1986.” Further, the noticeable factor in this regards is that employer who provides benefits to employee but restrict the utilization of the benefits for personal usages wou...Read More
Answer: Rhetorical analysis is used to gain an understanding of the writer or speaker success in communicating to the reader or the listener. Rhetorical analysis is a means of evaluating the work of another person to evaluate how he/she has successfully achieved the intended communication. The main objective of this paper is to explain what rhetorical analysis is and how it is done using various examples of rhetorical analysis. Basically, the ...Read More
Answer: Major historical landmarks for income tax Income tax was introduced in 1902 in Queensland (Australia 2018). Since then, many adjustments have been made depending on the historical event. For example, in 1915, during the wartime, income tax was expanded from territorial or state level to federal level Another major adjustment took place in 1942 during the Second World War During this time, Federal government took over raisi...Read More
Answer: Net trust income for Central Accounting Services for the year ended 30 June 2016 Over the given scenario of Central Accounting Services, this trust has been registered as Small Business Entity and it is also registered for the GST as well. In this business entity, there are two directors as Jim Lee and Mary Lee and the net trust income will be distributed in 50% each. The accounting information has been inferences from its accounting ...Read More
Answers: Part 1 In accordance of the Income Tax Assessment Act 1997, in section 6(1) there are three procedures applied to examine the company’s residential position for taxation. These are the procedures for incorporation, control and central management, and the stakeholders are controlled. If any one of the necessities are fulfilled by, the company then in Australia this company is measured as a tax resident. Again, under the Corporat...Read More
Just share requirement and get customized Solution.
Our writers make sure that all orders are submitted, prior to the deadline.
Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.
Feel free to contact our assignment writing services any time via phone, email or live chat. If you are unable to calculate word count online, ask our customer executives.
Our writers can provide you professional writing assistance on any subject at any level.
Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.
Get all your documents checked for plagiarism or duplicacy with us.
Get different kinds of essays typed in minutes with clicks.
Calculate your semester grades and cumulative GPa with our GPA Calculator.
Balance any chemical equation in minutes just by entering the formula.
Calculate the number of words and number of pages of all your academic documents.
Our Mission Client Satisfaction
Omg they’re doing very good I got 100 from 100 ???? thank you so much for your help you saved me
the writer did a good job but live chat is not working for my exam, so it waste some time
This solutions has been escalated & reworked 4 time, and has cause me lots of delays and time to submitting my final work to my professor. I hope this does not happen again. I am your regular and loyal customer, please do not do this again. I am ...
Excellent work ..I will keep in touch with my future work. Really appreciate all your effort . So far so good. thanks again.