Doc1 - Q9.3 a. The $20000 compensation from George and...

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Q9.3 a. The $20000 compensation from George and William and $100000 insurance compensation are not taxable because compensation for loss of physical abilities, pain, suffering, or medical expenses will be replacement of capital, and is exempt from CGT according to s118-37. However the $25000 insurance compensation for loss of salaries is taxable. According to s15-30: If you receive insurance compensation for a lost amount, if that lost amount would have bee included in your assessable income and is not ordinary income, then the compensation will be assessable. Thus compensation for Elizabeth’s loss of salary or wages is income: FCT v Dixon b. The $90000 for the story is assessable as the receipts are derived from providing services – writing the story, according to s6-5, it is ordinary income. It is also supported by Lehman & Coleman . c. Return air fares: $10000 is deductible. Elizabeth was sent to US to work, she was travelling on work. It means the fight expenses were incurred in doing her job, thus this part is
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Doc1 - Q9.3 a. The $20000 compensation from George and...

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