Solved by: AllAcademicHelp.com
Previous answers to this question 27: 16 7 3 0 1
HI6028 Taxation Theory, Practice and Law T2 2018HI6028 Taxation Theory, Practice& LawT2 2018 Individual Assignment(2500 words)Due date: Week 10Maximum marks: 20 (20%)Instructions:This assignment is to be submitted by the due date in soft-copyonly (Safe assign – Blackboard).The assignment is to be submitted in accordance withassessment policy stated in the Subject Outline and StudentHandbook.It is the responsibility of the student submitting the work toensure that the work is in fact his/her own work. Ensure thatwhen incorporating the works of others into your submissionthat it is appropriately acknowledged.HI6028 Taxation Theory, Practice and Law T2 2018Question 1 (10 marks)You are working as a tax consultant in Mayfield, NSW. Your client is an investor and antiquecollector. You have ascertained that she is not carrying on a business. Your client providesthe following information of sales of various assets during the current tax year:(a) Block of vacant land. On 3 June of the current tax year your client signed acontract to sell a block of vacant land for $320,000. She acquired this land inJanuary 2001 for $100,000 and incurred $20,000 in local council, water andsewerage rates and land taxes during her period of ownership of the land. Thecontract of sale stipulates that a deposit of $20,000 is payable to her when thecontract of sale is signed and the balance is payable on 3 January of the next taxyear, when the change of ownership will be registered.(b) Antique bed. On 12 November of the current tax year your client had an antiquefour-poster Louis XIV bed stolen from her house. She recently had the bed valuedfor insurance purposes and the market value at 31 October of the current tax yearwas $25,000. She purchased the bed for $3,500 on 21 July 1986. Although thefurniture was in very good condition, the bed needed alterations to allow for theinstallation of an innerspring mattress. These alterations significantly increased thevalue of the bed, and cost $1,500. She paid for the alterations on 29 October 1986.On 13 November of the current tax year she lodged a claim with her insurancecompany seeking to recover her loss. On 16 January of the current tax year herinsurance company advised her that the antique bed had not been a specified itemon her insurance policy. Therefore, the maximum amount she would be paid underher household contents policy was $11,000. This amount was paid to her on 21January of the current tax year.(c) Painting. Your client acquired a painting by a well-known Australian artist on 2 May1985 for $2,000. The painting had significantly risen in value due to the death of theartist. She sold the painting for $125,000 at an art auction on 3 April of the currenttax year.(d) Shares. Your client has a substantial share portfolio which she has acquired overmany years. She sold the following shares in the relevant year of income:(i) 1,000 Common Bank Ltd shares acquired in 2001 for $15 per share and sold on4 July of the current tax year for $47 per share. She incurred $550 in brokeragefees on the sale and $750 in stamp duty costs on purchase.(ii) 2,500 shares in PHB Iron Ore Ltd. These shares were also acquired in 2001 for$12 per share and sold on 14 February of the current tax year for $25 per share.She incurred $1,000 in brokerage fees on the sale and $1,500 in stamp dutycosts on purchase(iii) 1,200 shares in Young Kids Learning Ltd. These shares were acquired in 2005for $5 per share and sold on 14 February of the current tax year for $0.50 pershare. She incurred $100 in brokerage fees on the sale and $500 in stamp dutycosts on purchase.(iv) 10,000 shares in Share Build Ltd. These shares were acquired on 5 July of thecurrent tax year for $1 per share and sold on 22 January of the current tax yearfor $2.50 per share. She incurred $900 in brokerage fees on the sale and$1,100 in stamp duty costs on purchase.(e) Violin. Your client also has an interest in collecting musical instruments. She playsthe violin very well and has several violins in her collection, all of which she plays onHI6028 Taxation Theory, Practice and Law T2 2018a regular basis. On 1 May of the current tax year she sold one of these violins for$12,000 to neighbor who is in the Queensland Symphony Orchestra. The violin costher $5,500 when she acquired it on 1 June 1999.Your client also has a total of $8,500 in capital losses carried forward from the previoustax year, $1,500 of which are attributable to a loss on the sale of a piece of sculpturewhich she sold in April of the previous year.Required:Based on this information, determine your client’s net capital gain or net capital loss for theyear ended 30 June of the current tax year.Question 2 (10 marks)Rapid-Heat Pty Ltd (Rapid-Heat) is an Electric Heaters manufacturer which sells ElectricHeaters directly to the public. On 1 May 2017, Rapid-Heat provided one of its employees;Jasmine, with a car as Jasmine does a lot of travelling for work purposes. However,Jasmine’s usage of the car is not restricted to work only. Rapid-Heat purchased the car onthat date for $33,000 (including GST).For the period 1 May 2017 to 31 March 2018, Jasmine travelled 10,000 km in the car andincurred expenses of $550 (including GST) on minor repairs that have been reimbursed byRapid-Heat. The car was not used for 10 days when Jasmine was interstate and the car wasparked at the airport and for another five days when the car was scheduled for annualrepairs.On 1 September 2017, Rapid-Heat provided Jasmine with a loan of $500,000 at an interestrate of 4.25%. Jasmine used $450,000 of the loan to purchase a holiday home and lent theremaining $50,000 to her husband (interest free) to purchase shares in Telstra. Interest on aloan to purchase private assets is not deductible while interest on a loan to purchaseincome-producing assets is deductible.During the year, Jasmine purchased an Electric Heaters manufactured by Rapid-Heat for$1,300. The Electric Heaters only cost Rapid-Heat $700 to manufacture and is sold to thegeneral public for $2,600.Required:(a) Advise Rapid-Heat of its FBT consequences arising out of the above information,including calculation of any FBT liability, for the year ending 31 March 2018. You mayassume that Rapid-Heat would be entitled to input tax credits in relation to any GSTinclusiveacquisitions.(b) How would your answer to (a) differ if Jasmine used the $50,000 to purchase the sharesherself, instead of lending it to her husband?
The post Practice and Law T2 2018 HI6028 Taxation Theory, Practice appeared first on .
Do you need any assistance with this question?Send us your paper details nowWe’ll find the best professional writer for you!
READY TO PLACE AN ORDER