Part B: case study 5 marks (estimated 300 words). Include legislative references and calculations as necessary.
On 1 April 2008, Charles purchased 2,000 shares in ABC Ltd for $4.00 per share. On 1 June 2013, he also purchased 1,000 shares in NGB Pty Ltd at a cost of $14 per share, and 500 shares in OTM Pty Ltd at a cost of $8 a share. To purchase a flat, Charles sold some of his shares on 2 December 2017 at the following prices:
1,000 ABC Pty Ltd
â€‚$8.00 per share
500 NGB Pty Ltd
$13.00 per share
250 OTM Pty Ltd
$12.00 per share
Advise Charles of the capital gains tax consequences of the share sales for the 2018 income tax year. To do this, you will need to include calculations which show whether Charles has made a capital gain or loss in the 2018 income tax year. To support the analysis in your answer, refer, where appropriate, to the ITAA 1993, ITAA 1997, Taxation Rulings, other relevant statues and/or case law.
Part C: case study 5 marks (estimated 400 words). Use complete sentences in the answer.
Rebekah is from England, and arrives in Australia on the 1st of December 2017, to undertake a Bachelor of Business at Central Queensland University. On her departure, she rents out her English house for $1,000 per month. Once in Brisbane, she moves in with an old school friend. She immerses herself in Australian life and joins several sporting and social clubs. So that she can contribute to the household expenses, she gets a part time job at the local cinemas. Her earnings from this job are paid into an Australian bank account. Her earnings on 30 June 2018 total $11,000. Unfortunately, in early July 2018, Rebekah gets word that her mother is terminally ill, so Rebekah quits university and her job, and returns to England to become her motherâ€™s full-time carer.
Advise Rebekah whether she is likely to be considered an Australian resident for tax purposes for the 2018 income tax year. To support the analysis in your answer, refer, where appropriate, to the ITAA 1993, ITAA 1997, Taxation Rulings, other relevant statues and/or case law.
Part D: case study 8 marks (estimated 700 words) Use complete sentences in the answer.
Harriette has collected teaspoons for over 40 years and has over 400 in her collection. Every time she visits a new place, she purchases a new teaspoon or two to commemorate her visit. She keeps the teaspoons in several cabinets around her home and keeps them in pristine condition. Unfortunately, due to ill health, Harriette is forced to move into a smaller apartment, and cannot take her teaspoons with her. After much deliberation, Harriette decides to part with her spoons on eBay. Much to her surprise, Harriette usually sells the teaspoons for more than she originally paid for them. To make the transactions more straightforward, she created a separate PayPal account which she linked to her eBay account. In the 2018 income tax year, Harriette successfully sold all her teaspoons for a total of $1500.
Advice Harriette whether she would be considered for tax purposes to be â€œcarrying on a businessâ€ for the 2018 income tax year. To support the analysis in your answer, refer, where appropriate, to the ITAA 1993, ITAA 1997, Taxation Rulings, other relevant statues and/or case law.
Part E: case study 10 marks (estimated 700 words). Use complete sentences in your answer.
Aaron, who is an Australian resident for tax purposes, is a flight attendant who works for a domestic airline carrier.
In the 2017 income tax year, he has the following receipts:
- $74,500 in salary from the airline;
- $4,000 allowance from the airline for domestic travel expenses;
- $2,000 from the airline for actual expenses incurred for parking at the airport; and
- $400 from a casino win.
In addition, he has incurred the following expenses:
- $600 worth of speeding fines, incurred when he was rushing to make it to work so that the plane may depart on time;
- $500 for the purchase of two compulsory uniforms. The airline did not reimburse the cost of these uniforms;
- $300 for rehydrating moisturisers used to combat the drying effect on the skin when constantly exposed to harsh working conditions, and to meet his employerâ€™s strict grooming requirements; and
- $1000 for attending a seminar and training course in native beekeeping.
What is Aaronâ€™s taxable income for the 2018 income tax year? To support the analysis in your answer, refer, where appropriate, to the ITAA 1993, ITAA 1997, Taxation Rulings, other relevant statues and/or case law.