Reference no: EM131229208 , Length:
Case study 1: Capital Gains Tax
Fred is a resident who signed a contract to sell his holiday home in the Blue Mountains in August last year. The sale was settled in February this year when Fred received $800,000 from the purchaser. Fred incurred legal fees of $1100 (Inclusive of GST) and real estate agent's commission of $9,900 (Inclusive of GST) in relation to the sale. Fred purchased the holiday home in March 1987 for $100,000 and paid $2,000in stamp duty on the transfer and $1000 in legal fees. In January 1990, Fred engaged a builder to build a garage on the property for $20,000,
Calculate Fred's net capital gain for the current year. Assume he also has a net capital loss from last year of $10,000 arising from the sale of shares.
Would your answer be different if the loss arose from the sale of an antique vase?
(10 marks, max. 1000 words).
Case study 2: Fringe Benefits Tax
Periwinkle Pty Ltd (Periwinkle) is a bathtub manufacturer which sells bathtubs directly to the public. On 1 May 2015, Periwinkle provided one of its employees, Emma, with a car as Emma does a lot of travelling for work purposes. However, Emma's usage of the car is not restricted to work only. Periwinkle purchased the car on that date for $33,000 (including GST).
For the period 1 May 2015 to 31 March 2016, Emma travelled 10,000 kilometres in the car and incurred expenses of $550 (including GST) on minor repairs that have been reimbursed by Periwinkle. The car was not used for 10 days when Emma 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 2015, Periwinkle provided Emma with a loan of $500,000 at an interest rate of 4.45%. Emma 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, Emma purchased a bathtub manufactured by Periwinkle for $1,300. The bathtub only cost Periwinkle $700 to manufacture and is sold to the general public for $2,600.
(a) Advise Periwinkle of its FBT consequences arising out of the above information, including calculation of any FBT liability, for the year ending 31 March 2016. You may assume that Periwinkle would be entitled to input tax credits in relation to any GST- inclusive acquisitions.
(b) How would your answer to (a) differ if Emma used the $50,000 to purchase the shares herself, instead of lending it to her husband?
(10 marks, max. 1000 words).
Should the states take a more active role in emergency
: Should the states take a more active role in emergency management at the local level? Do you feel there is anything that the states could do to improve local capacities without infringing on their jurisdictional rights?
|
What type and degree of social influence may be impacting
: What type and degree of social influence may be impacting this reported lack of understanding and awareness of sexual assault as a crime? What steps would you recommend, or endorse if they are already in place, as necessary to address this situati..
|
Studying level 2 business administration
: Highschool student (grade 12) studying level 2 business administration Wish to present in an instructional booklet for my employees (max word 1,600) Topic autumn semester: organise workplace information explainon how to collect, organise and distrib..
|
Each of the products using an appropriate naive method
: Predict orders for the following day for each of the products using an appropriate naïve method. Blueberry Muffin: the basic naïve forecast is: 58 Cinnamon Buns: the basic naïve forecast is: trend-adjusted naïve forecast is: ? Cupcakes: the seasonal-..
|
Calculate freds net capital gain for the current year
: HI6028 Taxation, Theory, Practice and Law - Calculate Fred's net capital gain for the current year. Assume he also has a net capital loss from last year of $10,000 arising from the sale of shares.
|
Should additional governmental policies be developed
: What have the vast majority of research studies delving into the effects of violent media found with respect to children and violent imagery? Do you believe it is a parental right to allow young children to freely view or consume violent media imag..
|
How much should max be willing to pay for the service
: Jasper Valley Motors (JVM) is a family-run auto dealership selling both new and used vehicles. In an average month, JVM sells a total of 160 vehicles. New vehicles represent 60 percent of sales, and used vehicles represent 40 percent of sales. Assumi..
|
Summarize the psychological history of the offender
: Describe the psychological, behavioral, environmental, and cognitive factors that you believe led to the offender's criminality. The goal is to provide an analysis of the psychological history of the offender as it pertains to the offense(s).
|
Identify the products and the market segment
: For this discussion question, select a company that markets their products to similar, yet different, market segments. Be sure to identify the products and the market segment.
|