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HA3042 Taxation Law T1 2018 Individual Assignment Due date: Week 11 XXXXXXXXXXMaximum marks: 20 (20%) Instructions: This assignment is to be submitted by the due date in soft-copy only (Safe assign –...

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HA3042 Taxation Law T1 2018 Individual Assignment Due date: Week 11 XXXXXXXXXXMaximum marks: 20 (20%) Instructions: This assignment is to be submitted by the due date in soft-copy only (Safe assign – Blackboard). The assignment is to be submitted in accordance with assessment policy stated in the Subject Outline and Student Handbook. It is the responsibility of the student submitting the work to ensure that the work is in fact his/her own work. Ensure that when incorporating the works of others into your submission that it is appropriately acknowledged. Question 1 (3 Marks) Hilary is a well-known mountain climber. The Daily Terror newspaper offers her $10,000 for her life story, if she will write it. Without the assistance of a ghost writer, she writes a story and assigns all her right, title and interest in the copyright for $10,000 to the Daily Terror. The story is published and she is paid. She has never written a story before. She also sells the manuscript to the Mitchell Library for $5,000 and several photographs that she took while mountain climbing for which she receives $2,000. Requirement: Discuss whether or not the three payments are income from personal exertion. Would your answer differ if she wrote the story for her own satisfaction and only decided to sell it later? Question 2 (2 marks) Eric provides his employee with the use of a car for 183 days during the FBT year. During this period the car travelled 16,000 km. Eric purchased the car last year for $50,000. The employee contributed $1,000 towards the cost of running the car and has provided Eric with relevant documentation. Requirement: Calculate the taxable value of the car fringe benefit using the statutory formula. Question 3 (5 marks) Your client is a parent who lent $40,000 to her son to provide a short-term housing loan. The agreement is that the son will repay $50,000 at the end of five years. The loan was made to the son without any formal agreement and without any security provided for the sum lent. In addition, the client (the mother) has informed you that she told her son that he need not pay interest. However, the son repaid the full amount after two years and included in his payment an additional amount which was equal to 5% pa on the amount borrowed. Only one cheque was presented for the total amount. Requirement: Discuss the effect on the assessable income of the parent. Question 4 (10 Marks) Scott is an accountant who purchased a vacant block of land in Brisbane on 1 October 1980. On 1 September 1986, Scott built a house on the land. At the time, the land was valued at $90,000 and the cost of construction was $60,000. The property has been rented out since construction was completed. On 1 March of the current tax year, Scott sold the property at auction for $800,000. Requirement: a) Based on the information above, determine Scott’s net capital gain or net capital loss for the year ended 30 June of the current tax year. b) How would your answer to (a) differ if Scott sold the property to his daughter for $200,000? c) How would your answer to (a) differ if the owner of the property was a company instead of an individual?
Answered Same Day May 16, 2020 HA3042


Pulkit answered on May 22 2020
136 Votes
Question 1
Hilary is a famous mountain climber who was offered $10000 by a newspaper for writing for the paper her life story and how she spent her life. Without the help of anyone and get $10000 for all her interests, rights and also copyright. She also sold the manuscripts to the li
ary for $5000 and several photographs she took for some money.
With respect to the due case, the case would not be considered as payments received from personal exertion as the same does not arose from her own skill or talent. Hilary is a famous mountain climber If she would have written it for her own satisfaction and decided to sell later, the answer would be the same as she is selling her copyrights to a person. It would be the same. 
Question 2
The formula for calculating the taxable value of car fringe benefit
= {[ cost of the car x 20% x days of private use] / 365} – employee contribution
= {[50000 x 20% x 183] / 365} – 1000
= $ 4014
Here statutory rate is taken 20% on the basis of assumption the car is purchased after 2014.
Question 3
In the given case the parent lent $40000 to their son for the purpose of short term housing loan to be repaid after five years. One of the parent that is the mother asked the son to not to pay the interest on the same but after two years the amount of loan was repaid with interest at the rate of 5%.
The assessable income of an individual includes the taxable income for the income year and also the amount of child support provided. The interest to be received if...

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