Reference no: EM131207450 , Length: word count:1500
Question 1:
Two years ago Peta purchased a house in Kew. This house had two old tennis courts down the back which were in poor condition. She purchased the property for two reasons:
- so that she and her family could live in the house; and
- so that she could build three units on the tennis courts and sell them at a profit.
In the current tax year the tennis club next door offered to buy the old tennis courts, but only if Peta first restored them to good condition. Peta decided to accept the club's offer instead of going ahead with her plan to build and sell units.
Peta spent $100,000 on preparing the tennis courts for sale. This involved a great deal of work. Peta had to resurface the tennis courts and build new fences around them. She then sold the tennis courts in the current tax year to the tennis club for $600,000.
Ignoring capital gains tax, discuss whether the receipt of $600,000 is ordinary income under s 6-5.
Question 2:
Alan is an employee at ABC Pty Ltd (ABC). He has negotiated the following remuneration package with ABC:
- salary of $300,000;
- Payment of Alan's mobile phone bill ($220 per month, including GST). Alan is under a two-year contract whereby he is required to pay a fixed sum each month for unlimited usage of his phone. Alan uses the phone for work-related purposes only;
- Payment of Alan's children's school fees ($20,000 per year). The school fees are GST free.
ABC also provided Alan with the latest mobile phone handset, which cost $2,000 (including GST).
At the end of the year ABC hosted a dinner at a local Thai restaurant for all 20 employees and their partners. The total cost of the dinner was $6,600 including GST.
(a) Advise ABC of its FBT consequences arising out of the above information, including calculation of any FBT liability, for the year ending 31 March 2016. Assume that ABC would be entitled to input tax credits in relation to any GST-inclusive acquisitions.
(b) How would your answer to (a) differ if ABC only had 5 employees?
(c) How would your answer to (a) differ if clients of ABC also attended the end-of-year dinner?
|
Plot current i versus frequency for given frequency range
: Plot the impedance of the network versus frequency from 0 to 10 kHz. - Plot the current i versus frequency for the frequency range zero to 10 kHz.
|
|
Convertible into the united states
: Roadway Motors, a U.S. automobile company, produces a convertible at a plant in Germany on March 17, 2015. Roadway Motors imports the convertible into the United States on May 21, 2015.
|
|
What can we assume about work of art without such knowledge
: Looking at a work of art such as the Taj Mahal, which is the world's most recognized building, how does not knowing the story or context for its construction shape our perception of this as a master work of art? How does your perception change of ..
|
|
How are scarcity-choice and opportunity cost related
: 1) How are scarcity, choice, and opportunity cost related? 2) What are the effects of an increase in the minimum wage in the U.S. economy? Who would be most affected? 3) Why is elasticity of demand greater for goods that are a large share of a consum..
|
|
Discuss whether the receipt of $600,000 is ordinary income
: HA3042 TAXATION LAW - Advise ABC of its FBT consequences arising out of the above information, including calculation of any FBT liability, for the year ending 31 March 2016. Assume that ABC would be entitled to input tax credits in relation to any..
|
|
What are some of characteristics of intellectual disability
: What are some of the characteristics of intellectual disability (ID) that might affect a student's social interaction? Give two strategies that you can use to improve this area for a student.
|
|
Measuring consumer surplus online
: Explain the challenges in measuring consumer surplus of a free product like major online applications, such as Facebook and Google Search
|
|
Summarize your learning experience in an essay
: Compare the viewpoints of the instructors and summarize your learning experience in an essay of 1,000-1,250 words.
|
|
Enact a quota on swiss watches to reduce the trade deficit
: Suppose that the US government has decided to enact a quota on Swiss watches to reduce the trade deficit. What impact will this quota have on the trade balance? How will this change affect real and nominal exchange rates? What impact does the quot..
|