Tax Law Ass PDF

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Can Sarah claim a deduction on her travel expense from her home in Ryde to her accounting firm in Sydney CBD Is Sarah's salary to be considered as assessable income? Under s6-5(1) ITAA97 income from personal exertion means income from salaries and wages in relation to services rendered. Sarah’s salary of $120,000 from being employed as a full-time accountant is to be included in her assessable income. Therefore there is a sufficient nexus found with her salary of $120,000 from her personal exertion as an accountant.

Is Sarah’s work laptop to be considered as a fringe benefit? Is the cash award for "Best Accountant in Sydney" considered as assessable income? Under s15-2 ITAA97, mere prizes are not assessable income (Moore v Griffiths) supported by Parson’s Proposition 9 which states windfall gains are not income. However, unless there is an adequate connection between income producing activity and the prize, the prize has the character of income. Therefore, there is sufficient nexus between Sarah’s employment and the $5000 cash prize indicating it would be included in her assessable income (Kelly v FCT) under s6-10 ITAA97 Is the travel expenses of $2,000 between Sarah's accounting firm and the community college in Epping deductible from her assessable income? Is Sarah's earnings from teaching at community college assessable income? An amount is ordinary income under s6-5(1) where there is sufficient nexus between the taxpayer’s activity and their earnings. Sarah’s personal exertion through her services at the community college satisfies a sufficient nexus between her earnings of $20,000 and her teaching job at the college. Therefore, the $20,000 would be ordinary income and included in Sarah’s assessable income. Is Sarah operating as a business from competing in long-jump competitions and are the payments and prizes received by Sarah included in her assessable income? The four badges of business set out in TR97/11 must be considered to establish whether Sarah’s is carrying on a business through her long-jump competitions or rather it is a mere hobby. Firstly, does the taxpayers activities have profit making intentions? Her committed pursuit of excellence portrays her personal exertion, coupled with the several successful competitions earning her prize money and several appearances at sporting events suggest she has a profit-making purpose. Secondly, is the activity systematic and organized? Her successful competitions over the past years and her commitment to excellence indicates systematic and organized activities. Thirdly, what is the size and scale of activity? Sarah has been invited to make several appearances at major shows and multiply prominent long-jump competition eluding to a substantial size and scale of activity. Lastly, how frequent is the activity? Her participation in multiply competitions and appearances implies frequency. These four characteristics prelude that Sarah, as a professional athlete, is acting as a business and thus her prizes, cash and non-cash, are assessable as income. Noted under TR1999/17 stating, cash payments or other benefits received by individuals from involvement in sport are treated the same as other payments related to employment. This is backed by Parson’s proposition 14 stating a gain arises from an act done in carrying on a business has the character of income. Additionally, this case has similar facts to FCT v Stone, creating a precedent it isn’t necessary forprofit making intent to constitute a business. Thus, her $40,000 in prize money and $40,000 from appearances would be assessable income. Moreover, similar to the facts In the (non-cash benefits) case, the $4,000 coffee machine is also assessable income at an arm’s length transaction.

Are the multiply sales of antique bedroom furniture set considered as a CGT event? Under s108-10(2), all pieces of Sarah’s antique bedroom set are considered as collectible assets which CGT incurs. Sarah causes a CGT event A1 (s104-10(1)) for each transaction when she sold each piece separately a few weeks after purchasing them, handing over the ownership of the asset (s10410(2)). The special rule s118-10(1), negates capital gains/losses on collectible items purchase under $500. However, since each piece is apart of a set, you cannot acquire an exemption from s118-10(1), because the set combined had a higher cost base of $1,550 (450+350+350+400=$1,550) being higher than $500. Thus, the capital gain of $2,850 from the capital proceeds of $4,400 (s116-20(1)) minus the cost base of $1,550 (110-A), is added to Sarah’s assessable income (s102-5(1)).

Did Sarah incur a CGT on the sale of her Central Coast holiday home? -

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S 103-5) using value of property in calculating proceeds capital proceeds o 1,200,000 cheque o 300,000 holiday complex o 1,500,000 Cost base o 100,000 down payment s110-25(2) o 900,000 loan principle s110-25(2) o 100,000 loan interest cost of ownership - 110-25(4) o 7000 legal fee and stamp duty incidental costs - s110-35(4) o 3000 repairing broken roof tiles o 50,000 constuction of garage 110-25(5) o 1000 fees of sale s110-35(2) o = 1,161,000 Capital gain of 339,000 Held for longer than a year, individual (s115-15) 339,000x0.5= 169,500, is included as statutory income in her assessable income.

- CGT only applies to assets acquired or deemed to have been acquired after - 20th September 1985 (e.g., s100-25 (1)). - The time of the event is when she entered the contract ITAA97 s118-100 provides that a capital gain or loss as a result of a CGT - event happening to a main residence is generally Ignored if: o her holiday house Australian Taxation Office, Income Tax: Carrying on a business of primary production, TR 97/11, 16 November 2011. Stone v FCT (2005) 59 ATR 50...