Determine whether the amounts received are assessable income

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Reference no: EM131436454

QUESTION: Consider the following circumstances.

(a) On 3 March 2017, RJH Pty Ltd received a payout from an insurance company in relation to their building which had burnt down. RJH Pty Ltd received a total of $800,000 being $500,000 compensation for the loss of the building, $200,000 for the loss of trading stock and $100,000 for lost income. 

(b) On 21 March 2017, SAM Pty Ltd sold the worldwide rights to its product Dynamo for $700,000. Dynamo is one of many products that SAM Pty Ltd manufactures. SAM Pty Ltd is in the business of inventing new products, then selling them off as soon as they are profitable. The sale of these rights means that SAM Pty Ltd is unable to produce Dynamo in the future.

(c) On 30 June 2017, Minnie Me Pty Ltd agreed to sell its name and the rights to all its products to a competitor. It agreed to terminate its engagement in the industry. A single payment of $5,000,000 was received.

(d) On the last garbage collection day before Chinese New Year, Doris Tsui left $100 as a token of appreciation next to her garbage bin for collection by her garbage collectors. This is in accordance with Doris' usual practice at Chinese New Year, as it is with other residents in her garbage collection area.

REQUIRED: In regard to the above circumstances, determine whether the amounts received are assessable income.

Reference no: EM131436454

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len1436454

3/22/2017 5:08:18 AM

Should be according to Australian Case Laws and relevant sections / rules should be discussed. Just need 400-500 words. You must justify your answers. You should refer to relevant case law and legislation.

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