Tax : Page - 2

Normal ConditionRosemary had bought a vacant land, worth $50,000, on 20th October 1997 and build a house on that land on 20th May, 1999. She intends to sell the property for $300000 on 1st June,2017. She likes to know the tax consequences for selling the property. The report is prepared to provide advice to Rosemary on the capital gain tax consequences under the said scenario and, also, for some alternative situation. Tax Cons...

IssueWhether a valid contract was formed in this case, or not? Whether the exclusion contract was valid, or not? To fulfill a promise, two or more parties come together and form an agreement, whereby for fulfilling the stated promise, consideration is paid. When such an agreement contains some specified elements, it becomes a contract (Clarke & Clarke, 2016). When the promise, i.e., the conditions or stipulations of the contract, are co...

Case study 1: Residence and sourceIn the given case kit has permanent resident of the Australia and also retain his Chilean citizenship as he was born in Chile. He spent most of the time in Indonesia on the oil rig for the United States Company and entered into the contract for the same in Australia. In the given case the dual residency applies to the earning of the Kit and is considered as resident of Australia and his global income whethe...

Case 1: Mountain climber and income from personal exertionUnder the above case Hilary is a mountain climber and she is offered $10,000 for her life story if she writes her story. And after receiving the offer she writes her story without the help of ghost writer and assigns the interest and rights in the copyright for $10,000 (Lingopro. 2012). After the publication of the story she gets paid. After that she sells the manuscript for $5,0...

Jane Brown's Tax Calculation1.This case study contains different information about Jane Brown. The main issue is to compute the net tax refundable or payable in the existing tax year. The tax is computed through application of different provisions of pertinent laws. “Section 4(1) of the Income Tax Assessment Act” denotes that each individual, firm and other organisation are needed to incur income tax. “Section 4(10) of the I...

Sources of Income and their Taxation Implications1. a) As the dentist is delivering the professional service and he receives fees for it, this income will be taxable as per the section 6-5 of the Income Tax Assessment Act 1997 (Taylor & Richardson, 2012). The dentist provides physical effort for getting fees and thus, his income is subject to tax liability. It is not necessary that income can only be received as the form of money. There ar...

Analysis of the CasesIn the current trilogy of cases relating to timing namely “Canderal Ltd v Canada”, “Toronto College Park v Canada” and “Ikea Ltd v Canada” the Canadian supreme court laid down the principles which administers the time of identification of receipts and time of deducting the income expenditure. In “Ikea Ltd v Canada”, the court conversed whether the payments rela...

Residency Status of AmityAs per the definition given under “section 995-1 of the ITAA 1997” occupant or Australian dweller denotes individual that has their home in Australia, except for the tax officer is satisfied that the individual has their eternal place of house out of Australia (Woellner et al., 2016). “Section 6(1), ITAA 1936” explains that an individual is said to be an Australian resident if the pers...

Criteria for Tax Residency under ss. 6-1 ITAA 1936 and TR 98/17The individual tax residency is dealt with as per ss. 6-1 ITAA 1936. This subsection highlights the various statutory tests available to ascertain the tax residency status besides the general residency test. These tests have been discussed in detail in the tax ruling TR98/17. The tax residency becomes pivotal owing to the differential tax treatment that is applicable for Australian...

Concept of Assessable Income1: There are large amounts that is received by an organization would be considered as the assessable income. Assessable income represents any sum which is received would be treated as ordinary income given the income is earned from providing personal services, income from the property and earnings from carrying on of the trading activities. The assessable income includes the amount that is specified under the income...

Tax Residency Determination for Australians Working AbroadThe key aim in this task is to ascertain Amity’s tax residence for the tax year ending on June 30, 2016. The relevant tax law dealing with individual tax residency is ss. 6-1 ITAA 1936 which outlines the requisite tests for residency. Besides, a tax ruling which is relevant for the given task is TR 98/17 which demonstrates the use of the various tests with the aid of particular ca...

FBT ConsequencesFBT 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 would have FBT liab...

Prerequisites of Ordinary IncomeIs the annual payment a real gain for the taxpayer that is received periodically by the taxpayer or annually? If the receipts are not the genuine gain it cannot be classified as the ordinary income (D'Ascenzo 2015). In “Myer v FC of T (1987)” held that it is not necessary that the income should be received in this manner (McGregor-Lowndes 2016). In “Dixon v FC of T (1952)” t...

Facts About Jill and Her TransactionsThe issues involve: (1) whether the taxpayer be held assessable under the “section 6-5 of the ITAA 1997”; and (2) whether the taxpayer be entitled to claim the allowable deductions under “section 8-1 of the ITAA 1997”. As per “section 6, ITAA 1936” income from the personal exertion or income obtained from the personal exertion implies income comprising of the wage...

Rules and regulations for computing taxable incomeIncome tax is charged on the assessable income of the assessee. The government of Australia prescribed various rules and regulations for assessing the income of the person. In Australia, the Income Tax Assessment Act 1997, defined all the principles and standard for computing the income of the assessee (Doerrenberg, Peichl, and Siegloch, 2017). In this Act, various deductions and exemption ar...

Issue 1: Income from personal exertion1). Issues: The issue is related to the ascertainment of the income that is obtained from the media publications under “section 6-5 of the ITAA 1997”? Rule: Referring to the definition provided under “section 6-5 of the ITAA 1997” states that income from personal exertion refers to the income that an individual taxpayer earns from their personal efforts (Jones and Rhoades-...

Tax Planning for XYZ Family TrustA trust can be defined as the obligations that are enforceable in terms of equity that rests on the person, the trustee as the owner of certain specific property. “Division 6 of the Part III of the ITAA 1936” includes the principle rules for imposing tax on the trusts. In wider terms the rules assesses the trust net income relating to the trust estate of the beneficiaries. However, if there a...

Assessable Income and Deductible Outgoings in AustraliaOver the years, nations have been supporting themselves on the platform of imposing an income tax on its citizens to increase its revenue. This is because the government cannot function without funds. Thus, to ensure that there are enough funds to operate the nation’s activities, they typically collect taxes from their citizens. The term income tax can be defined as a tax imposed on ...

ITAA 1936 and ITAA 1997: Determining Net Income of PartnershipThe main issues that the current case study is concerned relates to the determination of the net income of the partnership within the meaning of “section 90, ITAA 1936”. An explanation has been made under the “division 4 of the ITAA 1936”, which clarifies that the partnership is not treated as the separate legal entity under the meaning of general law and no...

As stated in the “section 108-5 of the ITAA 1997” capital assets is usually referred as the form of property or any kind of the legal equitable rights which is not treated as the property.As stated in the “section 108-5 of the ITAA 1997” capital assets is usually referred as the form of property or any kind of the legal equitable rights which is not treated as the property. As stated under the “section 108-5 of th...

Ordinary IncomeAny kinds of gains from carrying on of the business is regarded as ordinary income under “section 6-5”. In order to illustrate the receipts as the ordinary income obtained from the activities of business there are two steps involved in it (Sadiq et al. 2013). Firstly, it is necessary to determine whether the taxpayer is conducting the business. Secondly whether the consideration of receipts is held as the norm...

Assessable Income and ExemptionsAn individual’s assessable income is subjected to income tax since it is added into the taxable income. Income according to the ordinary concepts is taxable under “section 6-5 ITAA 1997”. The court in “Scott v CT (1935)” held that income should be interpreted in terms of the ordinary concepts of mankind. Gains originating from business is an ordinary income under “section...

Assessable Income in Australian Taxation SystemThe Australian Taxation Office (ATO) is the main revenue collection agency of the government. The main role of ATO is to shape the tax and superannuation system in such a way that it acts as a pillar for fund services for the people out there but not limited to:: collecting income tax revenue for government monitoring the goods and services tax (GST) on behalf of the Australian states and terr...

Business vs. Hobby IncomeIn this report, income tax case study has been analysis which reveals the distinction between a person’s business and hobby cannot fade the ordinary concepts of income. This report analysis the tax implication in several cases such as car fringe benefit, tax computation and assessable income of the parent have been discussed. The main outcome of this report to evaluate the core aspects of the tax for the tax comp...

Answer:   Introduction An individual that are resident of Australia are assessed based on the “Resides Test” for the purpose of taxation and no other test are required to determine residential status of a person (Barkoczy 2014). The case study takes into the residential status of Nida for tax purpose. Furthermore, the present study will place emphasis on the domiciliary standing effecting the taxation liability of earnings g...