Question 1 determine whether the following benefits are

Reference no: EM13377323

Question 1 Determine whether the following benefits are fringe benefits or exempt fringebenefits and, where applicable, the relevant category of fringe benefit. Providereasons for your answer:

a) Kerry is an employee of the university. She is provided with 10 giftvouchers worth $50 each for use at the local supermarket as a Christmasgift. Advise Kerry and the University of the Tax Consequences of thistransaction.

b) Sorella borrowed $10,000 from her employer on 4 September 2011 asher home was damaged in a freak storm. The loan was provided at nointerest. On 15 January 2012, her employer informed Sorella that shewas only required to repay half the loan. Advise Sorella and heremployer of the Tax Consequences of this transaction.

c) Penny is employed as a secretary by a law firm. As part of herremuneration package, the firm agrees to provide her with legal servicesin relation to her divorce at a 60% discount to its normal rates. The firmalso purchases a plasma TV set for $5,500 (inclusive of GST), which itgives to Penny. Explain how the taxable value of these fringe benefitswill be calculated.

Question 2. Peter sold an investment property in Sydney and the transaction was settledon 30 June 2012 for $800,000. He incurred legal fees of $1,100 and a realestate agent's commission of $9,900 in relation to the sale. Peter purchasedthe investment property in March 1987 for $100,000. He paid $2,000 in stampduty on the transfer and incurred legal fees of $1,000 in relation to thepurchase.

a) Calculate the capital gain under the indexation method.

b) Calculate the capital gain under the 50% discount method.

c) Which method should be used in this case?

Reference no: EM13377323

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