Reference no: EM133145971

BULAW 3731 Income Taxation Law & Practice - Federation University

Purpose
There are two parts to this assignment: Part A (worth 20 marks) and Part B (worth 10 marks).

The purpose of this assignment is to enable you to research and explore aspects of taxation law and receive feedback on answering hypothetical advice-type questions.

You should appropriately reference your assignment and provide a reference list at the end of your assignment.

Part A
Topic
ABC Ltd. is a property developer which manages a large shopping complex on five acres of land at Officer, Victoria. As part of the expansion, they purchased an adjoiningtwo acres of land in 2020, at a cost of $7 million, for future expansion of the complex.

Also in 2020, ABC Ltd. sold some of their share investments which had been acquired twoyears ago. The shares had originally cost $1.5 million and were sold for $1.8 million. The funds from the sale of the shares were used to partly finance the purchase of the two acres of land.

Unfortunately, because of planning difficulties ABC Ltd. was only able to develop one acre of the land. It therefore later decided to sell the acre that it could not develop. To make this land more attractive to potential developers it subdivided the land into 5 parcels. By the end of the 2020/21 financial year, ABC Ltd. had sold three of these parcels. The first parcel was sold for $555,000. The second for $573,000 and the third for $567,000.

Required:
1. Citing all relevant legislation and case law, advise ABC Ltd. as to the tax consequences of the above transactions
2. If ABC changes its intentions to sell the remaining parcels of land and instead builds residential properties on the land and rents them out, what would be the tax and accounting consequences? Please advise with reference to tax law and relevant accounting standards.

Part B

Topic
Jenny works full-time as an accountant and has a farm where she trains four horses for racing. During her spare time, she places many bets on horse races. Last year, she placed 504 bets and won $15,500. She keeps a spreadsheet containing records of the bets and attends many horse races.

Required
Advise whether Jenny's gambling winnings would be assessable, referring to case law and legislation, and tax rulings where appropriate. 10 marks

You will be expected to:
• Identify and appropriately explain the range of tax issues connected with the fact scenarios posed in the questions
• Apply case law, legislation, and tax rulings (where appropriate) to the fact scenarios
• Communicate in clear written English
• Format your assignment appropriately