Immoral/Illegal receipts are taxable:
o Whether a receipt is legal or illegal does not affect its assessability.
o La Rosa (2003) declares income to ATO and gets deducted.
o Assesment related.
o Applies to recreatio
1/ Which of the following is/are NOT assessable Capital Gains?
$500 profit on the sale of a computer used in the business office.
$200 profit on the sale of a painting purchased for $550.
$400 profit on the sale of a digital flat s
1/ Norm operates a dairy farm and owns a separate small block of land
that has trees growing on it. A local saw miller pays Norm a lump sum of
$150,000 for the right to access the property and cut the timber. The
receipt of the $150,000 is:
Question 2 (Answer in the space provided)
Allow 14 minutes (8 marks)
Required: Ignoring capital gains tax, discuss whether the $1.3m
compensation receipt constitutes ordinary income.
Greg is a software developer, who runs a business th
1/ Based on the definition of trading stock for income tax purposes, which of the
following items is least likely to be trading stock?
Shares purchased by share traders for sale in the ordinary course of their
Land purchased by f
1/ Mr Schultz incurred the following expenses in relation to the factory
building that he operates his business from:
Upgraded the computer wiring in the office to carry faster internet traffic.
Work necessary to fix the walls of t
P R E PA R E D ! B Y ! W E S ! O B S T !A N D ! R A M I ! H A N E G B I ! F O R ! T H E ! U N I T ! T E A M !
1. Cash or convertibility to cash (Tennant V Smith 1892, FCT v Cooke & Sherden)
Employer reimbursed employee for work related loss not a real gain (Hochstrasser v Mayes
3. A regular/periodic gain
Faculty of Business and Law
MLC703 Principles of Income Tax Law
Deakin University Unit Guide
Trimester 2, 2016
WELCOME . 2
WHO IS THE UNIT TEAM? .
Unit Chair: leads the teaching team and is responsible for overall delivery of this unit .
Its when a party gets payment based on usage;
Some royalties are OI, some are capital;
If royalties are OI, then taxable as OI under s6-5 1997;
If royalties are capital, will usually be taxed as statutory income under s15-20 1997
What is tax?
o Compulsory levy of money to fund roads/hospitals/defense etc
o Not a penalty
o Not arbitrary
Formula to work out income tax payable?
o Income Tax = (taxable income x tax rate) offsets
o section 4-10(3) ITAA 1997
Taxable Income = Asse