User Account

All Pages

taxation, Taxation

Assignment Help:
Alec Smart is 59 years of age and is planning for his retirement. Following a visit to his financial adviser in March of the current tax year, Alec wants to contribute funds to his self managed super fund before 30 June of the current tax year. He has decided to sell the majority of his assets to raise the $1,000,000.
He then intends to rent a city apartment and withdraw tax-free amounts from his personal superannuation account once he turns 60 in August of the next year.
Alec has provided you with the following details of the assets he has sold:
1. A two-storey residence at Toorak in which he has lived for the last 30 years. He paid $70,000 to purchase the property and received $850,000 on 27 May of the current tax year, after the real estate agent deducted commissions of $15,000. The residence was originally sold at auction and the buyer placed an $85,000 deposit on the property. Unfortunately, two weeks later the buyer indicated that he did not have sufficient funds to proceed with the purchase, thereby forfeiting his deposit to Alec on 1 May of the current tax year. The real estate agents then negotiated the sale of the residence to another interested party for $ 850,000. 2. A painting by Sidney Nolan that he purchased on 21 September 1985 for $15,000. The painting was sold at auction on 31 May of the current tax year for $125,000. 3. A luxury yacht that he has moored at the Sandringham Yacht Club. He purchased the yacht in late 2004 for $110,000. He sold it on 1 June of the current tax year to a local boat broker for $60,000. 4. On 5 June of the current tax year he sold a parcel of shares in a newly listed mining company for $80,000. He purchased these shares on 10 January of the current tax year for $75,000. He borrowed $70,000 to fund the purchase of these shares and incurred $5,000 in interest on the loan. He also paid $750 in brokerage on the sale of the shares and $250 in stamp duty on the purchase of these shares. Alec has contacted the ATO and they have advised him that the interest on the loan will not be an allowable deduction because the shares are not generating any assessable income.
Alec has also indicated that his taxation return for the year ended 30 June of the previous year shows a net capital loss of $10,000 from the sale of shares. These shares were the only assets he sold in that year.
BBAL501 Taxation Law
Term 3 2013
Assignment Tasks
Part A: (25 Marks)
a. Based on the information above, determine Alec Smart’s net capital gain or net capital loss for the year ended 30 June of the current tax year. Show the various steps involved in the determination such as: i. CGT Events ii. Capital Proceeds iii. Cost Base iv. Eligible Discounts etc. for each item. (20 Marks) b. If Alec has a net capital gain, what does he do with this amount? If Alec has a net capital loss, what does he do with this amount? (5 Marks)
Part B: (25 Marks)
Alec and his wife Mary plan to roll their existing superannuation, currently with AMP Capital into a self managed superannuation fund. They seek your advise in relation to the following matters:
a. What is the maximum amount they can contribute into their superannuation fund by way of non-concessional contributions? (5 Marks) b. Can the fund invest in a holiday apartment on the Queensland Gold Coast to be used by their family? (5 Marks) c. Can the fund purchase some art work by Picasso to be hung at their apartment? (5 Marks) d. Can the fund invest in shares in a golf club so that Bruce and Mary can play golf for no cost to themselves? (5 Marks) e. Alec understands that once he turns 60 he is entitled to withdraw all the money from the superannuation fund tax-free. Is this correct? If so are there any tax benefits for keeping the money in the fund? (5 Marks)

Related Discussions:- taxation

Taxable income, The following 2012 projected income statement is provided b...

The following 2012 projected income statement is provided by your new client, John Green, single, and sole proprietor of Green Industries. Green Industries started business in Marc

Explain expatriation tax, An expatriation tax is a tax on somebody who give...

An expatriation tax is a tax on somebody who gives up their citizenship. In United States, the expatriation tax provisions under Section 877 and Section 877A of the Internal Revenu

Compute the service and interest cost for 2012, Sachs Brands' defined benef...

Sachs Brands' defined benefit pension plan specifies annual retirement benefits equal to: 1.2% × current service years × final year's salary, payable at the end of each year. Angel

Taxation without reprensentation, What happened during the Boston tea party...

What happened during the Boston tea party?

Calculate the tax, Sue, Scarlett and Sally are in a partnership together pr...

Sue, Scarlett and Sally are in a partnership together providing accounting services.  The partnership uses the cash basis to account for income tax.  Under the partnership agreemen

Recognized gain or allowable loss, I need help determining the character of...

I need help determining the character of the recognized gain or allowable loss in each of the cases listed below. In each case, these are all of the tax payer realized gains or los

Recognition of deferred tax liabilities, What is the amount of tax expense?...

What is the amount of tax expense? Describe the controversy with respect to the recognition of deferred tax liabilities?

Determine method of money transfer, Ted Testator died January 1st of this y...

Ted Testator died January 1st of this year.  Ted was married to Teri at the time of his death, but has two children, Timothy and Tabitha, from a prior marriage. You have been hired

Corporate tax, L has business assets worth $6,000,000, NOL carryovers of $1...

L has business assets worth $6,000,000, NOL carryovers of $1,000,000 expiring in 14 years, and NOL carryovers of $1,400,000 expiring in 15 years. 100% of L’s stock is worth $8,000

Computation, "Alfred E. Old and Beulah A. Crane, each age 42, married on Se...

"Alfred E. Old and Beulah A. Crane, each age 42, married on September 7, 2010. Alfred and Beulah will file a joint return for 2011. Alfred''s Social Security number is 111-11-1111.

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd