Section of Income Tax Assessment Act 1997 †Myassignmenthelp.Com

Question: Discuss About the Section of Income Tax Assessment Act 1997? Answer: Introducation Accounting to the case study, it has been found that Hillary is popular to climb up the mountains and she is a taxpayer of Australia. The existence of service delivery has aligned with some agreement depending on Section 393-10 of the Income Tax Assessment Act 1997. As inherent from the case study, Hillary has sold some photographs along with the manuscript of the entire story. Due to such causes, consideration of specific items has been made, which are termed as the personal assets of Hillary. Based on the findings of Brent v FCT (1971) 125 CLR 418, the occurrence of sale is inherent for earning normal treatment of income. Due to these reasons, a specific type of asset sale is to be adjudged as Capital Gains Tax (CGT). In case, Hillary has depicted her biography for self-comfort along with sale of the same in future, the transfer of copyright ownership could be treated as CGT events. This has been aligned with S-15-2 of Income Tax Assessment Act 1997, since no kind of agreement has taken place for generation of any sort of income (Barkoczy 2016). The entire amount of loan has been repaid within two years coupled with interest charges. Due to this, a payment of $4,000 ($40,000 x 5% per annum x 2 years) has been made to the client. However, the client has not demanded any sort of interest payment from the son. According to Section 6(5) of the Income Tax Assessment Act 1997, interest income is the additional amount of $4,000; which could be collected for assessable income associated with the parent considered to taxation. For this reason, a higher amount could not be related with ordinary income, as per Section 6 Subsection 5 (Graetz and Warren 2016). The capital gain or loss realised from selling the building is measured in consideration to the level, taking place from such sale. This is computed based on the following points: The purchase of property has been made before 20th September 1985. Due to this reason, it has remained confined within the asset category of CGT along with land sale and this might not be considered from taxation associated with CGT (Lang 2014). The computation of CGT has been carried out on effective selling of a residential land. Due to this, the projected selling price of the residential land has been computed as $320,000 [$800,000 x $60,000/ (S60,000 + S90,000)]. In this case, Scott has considered the calculation of CGT by seeking assistance from the two significant methods. Thus, it is needed to choose amongst the two methods for minimisation of tax payments (Morse and Deutsch 2016). Depending on the above-mentioned points, the entire capital gain or loss accumulated from sale of rental property is depicted as follows: According to the above table, it has been stated that Scott is needed to deal with the reduced payments of tax, in case; the discounted method is used. Therefore, the taxable capital gain of Scott from the sale of the rental property has been obtained as $130,000 (Petty et al. 2015). As per the case study, it has been collected that there is existence of auction arrangement for property selling where the selling of asset has been conducted. In addition, the selling price of the auction might be termed as the market price of the asset. Under such circumstances, the entire capital gain was determined to be realised from selling the property to the daughter, which would be identical as before (Tran-Nam, Evans and Lignier 2014). According to the provided scenario, it is estimated that an organisation acts as the owner of the property. For such causes, the computation of capital gain could be conducted through the technique of indexation. In this scenario, the overall capital gain from rental property could be $222,945. References: Barkoczy, S., 2016. Foundations of Taxation Law 2016.OUP Catalogue. Graetz, M.J. and Warren, A.C., 2016. Integration of Corporate and Shareholder Taxes. Lang, M., 2014.Introduction to the law of double taxation conventions. Linde Verlag GmbH. Morse, S.C. and Deutsch, R., 2016. Tax Anti-Avoidance Law in Australia and the United States. Petty, J.W., Titman, S., Keown, A.J., Martin, P., Martin, J.D. and Burrow, M., 2015. Financial management: Principles and applications. Pearson Higher Education AU. Tran-Nam, B., Evans, C. and Lignier, P., 2014. Personal taxpayer compliance costs: Recent evidence from Australia.Austl. Tax F.,29, p.137.