$20 Bonus + 25% OFF
$20 Bonus + 25% OFF
Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!
Add File

Error goes here

MLC703 Principles Of Income Tax Law

tag 0 Download13 Pages / 3,154 Words tag Add in library Click this icon and make it bookmark in your library to refer it later. GOT IT

Question

Part -1 Problem Question 1A

Kristie is 42 and decided to buy an investment property with a view to selling the land in the future to fund her retirement. She considered between buying an inner suburban house on a small piece of land or an outer suburban house on a larger piece of land. She eventually decided on the larger outer suburban house. Although her primary intention was to hold the house and sell it at her retirement, one of the factors that made her decide to buy the outer suburban house is that she wanted to be open to the possibility of developing the land in the future.

As it turned out, 12 months later Kristie got lucky in that her investment property was rezoned by her council, which meant that she was able to build a 5 storey apartment on its land (subject to local council approval). She went to a lot of work to get local council approval, which involved getting a professional planner to draft sketches and plans as to what the proposed apartments would look like. This cost her around $15,000. After gaining council approval, she decided that she did not want to be actively involved in the building process, and so paid a professional builder $7m to construct the apartment block (and demolish the existing house). When the apartments were complete rather than sell each unit individually, she sold the whole block herself to a rich investor for $12m.

Required: Ignoring Capital Gains Tax, discuss whether the sale of the apartment block generates ordinary income. 

Where appropriate, support your answer with legislative and case authority.

Problem Question 1B

Dave, on 1 February 2013, entered in a contract to purchase:

  • A premises with a factory that manufactures doors, for $900 000; and
  • Goodwill relating to the door business for $100

Dave after the purchase ran this door manufacturing business, and did so as a sole trader.

Dave’s sole customer of the doors was a retail outlet called DoorsRUs, which sold doors to the general public. Initially Dave did not have any long-term contract with DoorsRUs. However, this changed on 1 July 2016, at which time, Dave and DoorsRUs entered into an 8 year contract for DoorsRUs to purchase doors from Dave’s business at a set price.

During 2017, Dave suffered from ill health, and so looked at selling the door manufacturing business. At first he could not find any buyers and considered closing the business down. However, as DoorsRUs still wanted a supply of doors, it decided to purchase the business from Dave and continue to run it themselves. As a result, on 10 January 2018, DoorsRUs and Dave (who was 53 at the time) entered into the following agreement:

  • DoorsRUs would purchase the factory premises from Dave for $2 000 000.
  • DoorsRUs would purchase the goodwill from Dave for $400
  • The balance of the 8 year agreement between Dave and DoorsRUs was to be cancelled. As compensation for this, DoorsRUs was to give Dave $80 000 as a lump sum.
  • DoorsRUs would pay Dave 3 lump-sum annual payments of $10 000 each in exchange for Dave not competing with them in the door manufacturing business.

Dave estimates that for the time he owned and ran the business, annual revenue was between $3-$3.5 million.

Dave owned the following assets at the time of entering the January 2018 agreement:

  • A house he lived in (located in Burwood). This was worth $1.1 million, and had a $500 000 mortgage on
  • A rental property (located in Coburg) worth $650 000 (referred to below). This property had a $200 000 mortgage on
  • A superannuation account with a balance of $400
  • A life insurance policy worth $200
  • A 20 per cent interest in a company called Invest Pty Ltd which Dave has owned for the last 5 years. This company owned various shares in publicly listed companies. This company had a market value of $800
  • A 60 per cent interest in a company called Property Pty Ltd, which is a property developer. The company had a total market value of $550,000.

Dave had previously, on 20 January 2013, purchased an apartment in Coburg as his main residence (for $380 000), and had paid stamp duty of $20 000 at the time. He had immediately moved into it and treated it as his main residence. However, on 20 January 2015 Dave bought the abovementioned house in Burwood to live in, moved into it immediately, and treated it as his main residence. At the time the Coburg apartment was worth $600 000. Dave entered into a contract to sell the Coburg apartment on 20 January 2018 for $650 000.

Required: Advise Dave on the Capital Gains Tax implications regarding the above transactions for the 2017/18 tax year – please ensure that your discussion includes advice on whether he can take advantage of the CGT Small Business Concessions to reduce the amount of tax payable on his Capital Gains.

Part 2: Policy Based Question:

Negative gearing is a feature of the Australian tax system where losses (including interest expenses) on investments can be used to reduce the tax payable on the taxpayer’s other income, such as their salary income.

Some have advocated for the removal of negative gearing. Discuss the arguments for and against the removal of negative gearing. In your discussion, please consider this in the context of fairness, efficiency, protection of government revenue and any other relevant considerations.

Download Sample Now

Earn back the money you have spent on the downloaded sample by uploading a unique assignment/study material/research material you have. After we assess the authenticity of the uploaded content, you will get 100% money back in your wallet within 7 days.

Upload
Unique Document

Document
Under Evaluation

Get Money
into Your Wallet

Total 13 pages, 1 USD Per Page

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2021). Principles Of Income Tax Law. Retrieved from https://myassignmenthelp.com/free-samples/mlc703-principles-of-income-tax-law/policy-base.html.

My Assignment Help (2021) Principles Of Income Tax Law [Online]. Available from: https://myassignmenthelp.com/free-samples/mlc703-principles-of-income-tax-law/policy-base.html
[Accessed 15 April 2021].

My Assignment Help. 'Principles Of Income Tax Law' (My Assignment Help, 2021) <https://myassignmenthelp.com/free-samples/mlc703-principles-of-income-tax-law/policy-base.html> accessed 15 April 2021.

My Assignment Help. Principles Of Income Tax Law [Internet]. My Assignment Help. 2021 [cited 15 April 2021]. Available from: https://myassignmenthelp.com/free-samples/mlc703-principles-of-income-tax-law/policy-base.html.


Human resource management is an important subject matter for the students pursuing an M.B.A. degree. However, do you know the proper essay outline to complete the assignment? For instance, your task requires you to choose compare and contrast essay topics, will you be able to write the assignment? If you are finding it difficult to complete the assignment, you can bestow your faith on the assignment makers at MyAssignmnethelp.com to provide optimum assistance. Moreover, the website is renowned for its attractive offers at an economical price to make itself one of the cheap essay writing service today.

Latest Tax Samples

LAWS20060 Taxation Law Of Australia

Download : 0 | Pages : 11

Answer: 1. (a) Block of vacant land: The selling of land could be adjudged as CGT event and in accordance with “Section 108-5 of ITAA 1997”; the land could be termed as CGT asset. When this is the case, the land sale triggers the event A1, which takes place at the time of signing the contract on 3rd June of the current tax year, which complies with “Section 104-10 of ITAA 1997”. The capital proceeds from this sale...

Read More arrow

HI6028 Taxation Theory Practice And Law

Download : 0 | Pages : 6

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 arrow

TAXX301 Taxation

Download : 0 | Pages : 30

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 arrow

LAW 6001 Taxation Law

Download : 0 | Pages : 3

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 arrow Tags: Australia Melbourne Law LAW 6001 Taxation Law  University of Melbourne 

PACC6006 Taxatation Law

Download : 0 | Pages : 13

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 arrow
Next

Save Time & improve Grade

Just share requirement and get customized Solution.

watch
question
We will use e-mail only for:

arrow Communication regarding your orders

arrow To send you invoices, and other billing info

arrow To provide you with information of offers and other benefits

Add File

Error goes here

1,647,755

Orders

4.9/5

Overall Rating

5,121

Experts

Our Amazing Features

delivery

On Time Delivery

Our writers make sure that all orders are submitted, prior to the deadline.

work

Plagiarism Free Work

Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.

time

24 X 7 Live Help

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.

subject

Services For All Subjects

Our writers can provide you professional writing assistance on any subject at any level.

price

Best Price Guarantee

Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.

Our Experts

Assignment writing guide
student rating student rating student rating student rating student rating 5/5

2109 Order Completed

99% Response Time

Emma Zhong

Ph.D in Project Management with Specialization in Project Communications Management

Singapore, Singapore

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

285 Order Completed

99% Response Time

Eugene Baranowski

MBA in Supply Chain

London, United Kingdom

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

2279 Order Completed

97% Response Time

Zachary Perez

PhD in Computer Science and Information System

Washington, United States

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

1265 Order Completed

97% Response Time

James Cook

Masters in Management

Wellington, New Zealand

Hire Me

FREE Tools

plagiarism

Plagiarism Checker

Get all your documents checked for plagiarism or duplicacy with us.

essay

Essay Typer

Get different kinds of essays typed in minutes with clicks.

edit

GPA Calculator

Calculate your semester grades and cumulative GPa with our GPA Calculator.

referencing

Chemical Equation Balancer

Balance any chemical equation in minutes just by entering the formula.

calculator

Word Counter & Page Calculator

Calculate the number of words and number of pages of all your academic documents.

Refer Just 5 Friends to Earn More than $2000

Check your estimated earning as per your ability

1

1

1

Your Approx Earning

Live Review

Our Mission Client Satisfaction

Thank you so much for your support and quick turn around. I really appreciate it.

flag

User Id: 667737 - 14 Apr 2021

Australia

student rating student rating student rating student rating student rating

Excellent service. First I had an inconvenience with my assignment but it was quickly sorted out within 24 hours of me reporting it and was giving an excellent paper. Perfect wording and citation. Just remember that these are human being that are wor...

flag

User Id: 659071 - 14 Apr 2021

Australia

student rating student rating student rating student rating student rating

I have been using myassignment help for over 2 years now and I continue to be impressed with their quality of work, on point turn around time for assignments and professionalism with customer service. No dissapointments so far. Keep up the good work...

flag

User Id: 225971 - 14 Apr 2021

Australia

student rating student rating student rating student rating student rating

i ask to redo the work and the exert did a great job correcting and redoing it. Thank you sooooo much

flag

User Id: 544546 - 14 Apr 2021

Australia

student rating student rating student rating student rating student rating

Order on the go!

Say hello to our new app

callback request mobile
Have any Query?