Will adam be assessed on the 400 rental per week that he

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Adam Smith is a self-employed artist and is married with four children. On 1 April 2013, he borrowed a sum of money to buy an apartment for long term investment purposes. Currently, the apartment is rented out to his grandson, Jake for $400 per week although most apartments around that area were rented out for $500 per week. Jake lives in the apartment with his girlfriend.

Adam also hired an office space at a prime location for four months to display and sell his art work from 1 March 2014. The rental is $7,000 per month and he paid $28,000 on 1 March 2014 to cover the 4 month period.

ISSUE 1.1
Will Adam be assessed on the $400 rental per week that he charged Jake or will he be assessed on $500 per week which is the market rate?

Reference no: EM13583289

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