Differences between ordinary income and statutory income

Assignment Help Taxation

Reference no: EM13271532

Part 1: Case study

Janet (taxpayer) residing in Australia is named as the sole beneficiary of a property (1.85 hectares) with a large homestead as a result of the death of a relative on 7/10/2010. The property is not used for commercial purposes and at the date of death, the property was valued at $1.45million.

Settlement took place on 21/12/2010. After moving into the homestead shortly after taking ownership, she planned to take a one-year trip which she had been planning for some time in late 2011.

The taxpayer felt that the homestead was far too large for her (she is single), applied to the ATO for an exemption for ABN registration and some fourteen months later (16/2/2012), she obtained council approval to subdivide the property into three, with the intention of building three units, one she will take up as her own residence, the other two will be sold.

Work commenced some weeks after approval and on 12th December that same year, the taxpayer returned and moved into one of the apartments. The other two were sold in March/April in 2013, one selling for $1.35m (24/3/2013), the other for $1.45m (9/4/2013). You are to consider the CGT implications both from the relevant sections (ITAA), rulings, etc. and from the values (if/where applicable). Assume that the blocks are subdivided equally.

For each determination that you make, you should clarify. You should also clarify what Capital Gains and CGT is in your answer

Part 2: Question

Explain using examples and relevant sections of the act, what the differences between Ordinary Income and Statutory income are. Use your own examples (not from MTG or Barkoczy text).

Reference no: EM13271532

Questions Cloud

Express this path difference in terms of the wavelength : A pair of slits, separated by 0.180 mm, is illuminated by light having a wavelength of ? = 612 nm. Express this path difference in terms of the wavelength

What is the present value of the furniture payments : If the discount rate is 6 %, what is the present value of the furniture payments.

Explain stock solution that must be diluted : You have 47.0 L of 93.00 M stock solution that must be diluted to 0.500 M. How much water should you add

How much money is currently in the account : The money has not been touched since a first deposit was made exactly six years ago. If the most recent deposit was made today, how much money is currently in the account?

Differences between ordinary income and statutory income : Explain using examples and relevant sections of the act, what the differences between Ordinary Income and Statutory income are. Use your own examples (not from MTG or Barkoczy text).

Determine what type of driving style is being used : .a. If the following voltage pulse is being applied to a stepper motor coil to the increment the shaft, what type of driving style is being used b. What advantage does this have as opposed to a constant-voltage pulase

How long is the jumper in the air : A jumper in the long-jump goes into the jump with a speed of 12m/s at an angle of 20 deg above the horizontal. How long is the jumper in the air

How important was secular music during the renaissance : How important was secular music during the Renaissance? Was secular music performed only by trained musicians or was everyone expected to get in on it too?

Explain what nacl concentration results of nacl solution : What NaCl concentration results when 234 mL of an 0.640 M NaCl solution is mised with 6.52 mL of a 0.450 M NaCl solution

User Account

All Pages