Mit613 Taxation Law And Capital Assessment Answers

Questions:

Answers:

Question 1 

1. This case study shows that the dental work value of a dentist is exchanged at   $600 for video worth $550 with a retailer.  To the retailer, the cost of the video was $300, but the market value of the video was $550. Through this, the retailer gains $250, but any income is not increased by the dentist in his work value. The market value of the dentist is less than the dentist's work value of the substitute video. So the exchange was not profitable for any of the dentists. Any kinds of tax not will be charged for this transaction. According to this case study, the retailer gain more profit by this exchange (Woellner, 2007). So according to the taxation law of Australia, the retailer should be charged under the tax of the profit which he had increased. End of this study it is clear that the taxation law of Australia is applicable for the retailer not for the dentists because the dentist did not get any profit from this exchange.
2. As per the case of the pensioner, the surplus eggs valued at $150 are replaced by the pensioner in that year when a neighbour of the pensioner had grown surplus vegetables in a home garden. So the pensioner transferred the egg with the vegetables of the neighbour.  In this case study, it is clear that the pensioner intentionally earns an income from the farming. Instead of giving the eggs to the neighbour he exchanges the vegetables with the eggs. As per the general knowledge, the market price of the plant is more than the market value of the eggs, so according to this case, the pensioner gain more profit the neighbour. According to the taxation law of the Australia, the pensioner has to pay the income tax which is charged on that person (Woellner et al., 2016). Through the exchange of the eggs with the vegetables the neighbour was not able to gain any profit, but the trade was beneficial for the pensioner. So the retire was eligible and forced to pay the taxation bill according to the tax law of the Australia.
3. As per the 3^rdstudy of the builder, a person was helped by a manufacturer at the weekend to build up his/her house on the basis of few terms and conditions. The condition was that the builder could provide the group to the person for making the house in return for the amount of the $10,500 which the person has to pay to the group provided by the builder. The individual charge of the builder was $11,000. The market value of the convoy in more than $12,000. So according to this case, the person didn't gain any profit from the building (Woellner, 2013). The investment of the person is more than the market value of the builder's work. So in this case the exchange of the money and build up the home the individual person gain a high loss, so he will not considered under the taxation law of Australia. No tax bill will be charged for him.
4. According to the case study, the event of clearing rubbish is arranged by an accountant with the help of his expertise. There is no consultancy fees are given so the profit or the loss of the person is difficult to find out. According to the ITAAA 1997 the income of the person will be assessable if he gets any profit from that local charity. There will be no tax issued for the person if there is no intentional income achieved by the person and he really has the intention to give the support in the local charity and arrange the rubbish cleaning event.

Question 2

1. As per the study of this case, investors of a building society gain a car valued at $15,000 as a prise from competition.  In that specific year, there was an open competition any one can participate in that competition, but the entire competitor should maintain the minimum balance of $10,000. As per the ITAA 1939, the income of the depositors will not be considered as the assessable income. So the revenue from the prize is not applicable under the taxation law according to ITAA 1939. According to the Division 30 of the income tax act 1997 of Australia, the income of the depositors should be considered under the assessable income (Woellner, 2005). The gift or prize also must be assessable for the taxation purpose.  The tax of the depositors will be calculated on the basis of the assessment of the gift money. So the depositor has to pay $15,000 as the fee.
2. As per the second case, the long term loans are gained by a large industrial firm which is about $1Million, which is not considered under the income character. In both of the provisions, there is not any clause of taxation laws that makes the payment of assessable for the income tax (Seago, 2016). In this case, the both of the revenue of the firm that is not considered as an assessable income for the both provisions of Income Tax Act in 1936 and Income Tax Act in 1997.
3. According to the last case study, a company pays travel allowance of cash amounting to $4,500 to an employee who was carrying out tasks that was needed for that particular company. For that purpose, the individual workers were paid at least 45 cents per KM travel. According to the proposition of the income tax act in 1936, it is not considered as the assessable  income. However, the income tax act in 1997 has provision for assessing some income as high rate of assessable income. According to the rules prescribed by the ATO, travel allowancesare not needed to be declared as an income for an individual company taxpayer. According to the individual income tax act in 1997 has provision to assess the high rate income as assessable income (Prince, 2016). Hence, the income which the individual employee made from the particular company as travel allowance at the price of $4,500 is not considered as the assessable income and the individual workers are free from the tax purpose. According to the income tax act in 1997, the income above of the depositor is considered as the assessable income because as per division of thirty of the income tax act in 1997 the gift must be assessable for taxation purpose (Prince, 2013). The high rate of income of the individual depositor has not varied as the assessable income as per as the income tax act in 1936 that it is according to the income tax act of the applicant is not assessable.

Question 3

In this case study, the car was severely damaged which focusing on some of the information is made by showing the explanation of the work. The case study analysis is surrounding the individual incident where in a hurry for attaining the lecture, the representation of the income tax is not included as this is a form of the accident which is being shown in this case. In this process, it is shown that the inappropriate execution of the particular situation which is presenting the individual work as it is being represented through the appropriate show of the explanation of the work. This case analysis surrounds the incident when there was a student in hurry for attaining the lecture, the demonstration of that individual tax income is not concluded in the form as this is the accident which is being shown in this case. This simply shows the presentation of the work which is explaining in that individual case of showing the explanation of the work (Lakshmanan, 2015). This shows that three quotes were obtained and they are being explained by that Vice-chancellor as it is being informed the act by showing the explanation of the work. The undertaken case was simply reveals the difficulties faults of mine, and also the individual cost price that must be paid to the chancellor who will pay the amount of money that $2000. As per the implications are considered capital income tax or the capital gain tax cannot be included in that individual study. It also explains the appropriate framework of the work which is showing the enhancements of the study as it is being presented in that individual case. In this case study, the particular improvement of the work is not complete. The differentiation is being made by explaining the particular case study like this it only states the working of the capital gain tax in the form of implications (Krishna, 2015). Thus the value cannot be explained by illustrating the transactions that it is made by showing the appropriate explanations of the work.

Question 4 

According to the way the case study is conducted, it clearly explains that Mr. and Mrs. Martin possess two shares; both of their shares belongs to the same company which is controlled their family. The process of establishment of the business was started in 1980 which explains the objective of the retail business. The premises where the stores are located comprise of a land in Bendigo. The Martins had two children, who were twins and are about to be 18 years of age on 1^st July. One was a girl child, while the other was a boy. Hence the plan which is made at present clearly tells that the Matins are going to hand over one share to each child and the study has been enhanced by the display of proper illustrations of the case in consideration.

• According to the issues concerning the Taxes for Gains in Capital is considered. The present issues that are related to the transfer of shares as the age of both the children are below 18 years. According to the rules and the regulations of the case that are considered the issues relating to the capital gains tax can be quite comprehensibly displayed through the illustration of the ways of transfer of the arrangement as it is provided in the case that is being considered. Provided the issues concerning the transfer of shares would not have taken place, then after the demise of Mr. Martin, the children would have received the two shares in an equal proportion. Mrs. Martin would also not require providing the share of her part to the girl child (Chow, 2015). Hence the issues would not exist as it involves the sudden demise according to the assumptions of the case. The taxes on the capital gains would be implemented in an easy way on the two children of the Martins’ on behalf of their shares in the property. It is also possible that some issues are raised regarding the age of the children.
• The implications that exist regarding the company belonging to the family are shown to be dependent on the two conditions that are adopted in the process of working on the study. The following features are depicted:

1. The purchase of the land that was lying vacant in Bendigo is shown to have been taxable according to the section of the capital gain tax consideration. The section 45(1) of the capital gain tax makes the clear statement about the taxes which are charges for the purchaser. The chargeability will be applicable for the assets and the other properties according to the belongings that the client is making. The evaluation of the assets and the process of assigning them to the two children must be conducted carefully in order to ensure that both these steps can be performed in the desired manner. It will give the desired results in the form of a proper share going to each of the children involved in the case (Engdahl, 2011). The implementation of the taxes applicable to the gains in capital would be implemented in an easy manner.  
2. Purchasing a retail business that is being operated by the process of providing premises that are leased in Queensland is also being indicated as taxable. It is because the process involved in the leasing of the products along with the property in consideration requires paying a rental tax. The taxation is conducted as per the party decides to perform it for the purpose of setting up the business. According to the different codes and ethics that are considered in the case that are being dealt with, the issues relating to capital gain tax which can be easily depicted. It is by showing the ways to transfer of the arrangement according to the provisions given in the case study.

References

Woellner, R. (2007). 2007 Australian taxation law. North Ryde, N.S.W.: CCH Australia.

Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D. (2016). Australian Taxation Law 2016. Melbourne, Vic.: Oxford University Press.

Prince, J. (2013). Tax For Australians For Dummies. Hoboken: Wiley.

Prince, J. (2016). Tax for australians for dummies. Hoboken, N.J.: John Wiley & Sons.

Seago, W. (2016). The tax aspects of acquiring a business. New York: Business Expert Press.

Chow, M. (2015). Australian master tax guide 2015. CCH Australia.

Engdahl, S. (2011). Taxation. Farmington Hills, MI: Greenhaven Press.

Krever, R. (2007). Australian taxation law cases 2007. Pyrmont, N.S.W.: Lawbook.

Krishna, V. (2015). Income Tax Law. Toronto: Irwin Law.

Lakshmanan, J. (2015). Taxation laws. [Place of publication not identified]: Universal Law Publishing.

Woellner, R. (2005). Australian taxation law 2006. Sydney, N.S.W.: CCH Australia.

Woellner, R. (2013). Australian taxation law 2012. North Ryde [N.S.W.]: CCH Australia.