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This is Taxation law assignment. You need to answer the question given.

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This is Taxation law assignment. You need to answer the question given.
Answered Same Day May 16, 2020 HA3042


Pulkit answered on May 22 2020
132 Votes
Question 1
S 393-10 of the ITAA 1997 includes income by way of salary, bonus, commission, pension and other benefits, income from business, and the income from any property forming part of the service, the income from sale of property and similar other income earned as income from personal exertion. S 6 of the ITAA 1997 specifically excludes interest income received except in the business of lending and rents and dividends from the definition of the income.
Based on the above definition of income, the payment of $ 10,000 received by Hilary is to be taken as personal exertion income. As per the case of Brent v FCT (1971) 125 CLR 418 in which the taxpayer had sold the copyright of her husband’s life story and the court held that she would be liable to pay tax as assessable income and not as capital gain as the payment was made in exchange of her time and services. Hilary will also be treated in the same manner and the income earned by her on the sale of her right, title and interest in the story that got published.
$ 5,000 earned by Hilary by way of selling the story manuscript to Mitchell Li
ary is alo a part of personal exertion income because of the same reasons as explained above.
$ 2,000 for the sale of photographs is also a part of her personal exertion income. This payment was received due to her skill of mountain climbing.
Where Hilary first wrote the story on her own will and sold it later; the same treatment mentioned above would apply as the income was still earned by her personal efforts and skill.
Question 2
One can calculate the taxable value of a car fringe benefit either by using the statutory formula method or by operating cost method. By using the statutory formula method the taxable value of car fringe benefit is calculated as follows:
The formula for calculating the taxable value of car fringe benefit
= {[ cost of the car x 20%* x days of private use] / 365} – employees contribution
= {[50000 x 20% x 183] / 365} – 1000
= $ 4014
*Here statutory rate is taken 20% as the kilometers...

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