In this case, Michael has submitted an amount of $10000 with the financial institution so that he can receive an amount of $2500 at the end of each financial year. The Para 12 and Para 13 of the TR 98/1 states the meaning of business income and invest income. In this case, the amount received by Michael is not a business income or investment income as per the meaning discussed in Taxation ruling 98/1.
The “Personal service income” means income earned by the individual as the direct reward of the personal effort. The royalty income from writing the bestselling book and should be included in the assessable income.
The taxpayer sold the land to the animal shelter for $150000. The section 100-25 of the Income Tax Assessment Act 1997 states that land or building is a part of the CGT assets. The section 102-5 of the ITAA 1997 states that the capital gain should be included in the assessable income. In this case the land adjacent to the factory have been sold and it should be treated as a separate capital assets as per section 108-65 of the ITAA 1997. Therefore, it can be said that the income derived from the sale of land is a capital gain and not an ordinary income.
The profit on sales of subdivided land can be regarded as the capital gain or ordinary income depending on the particular circumstances of the case. The profit from sell of block of land shall be regarded as the ordinary income if the intention for entering into the transaction was to make profit and the transaction was made as a part of business. In this case, it can be said that the income of $200000 for each block should be included as the ordinary income.
In this case, Susan is an art dealer and has also won prize money by participating in the poker game. The IT 2655 Income tax on betting and gambling states that the income from should be included in the assessable income if the taxpayer is carrying on a business of gambling. The winning of a poker tournament and the maintaining of record for winning or loss does not indicate that the taxpayer is carrying in the business of betting and gambling. Therefore, in this case the income of $4000 received by Susan is not taxable.
The ATO ID 2002/644 states that the prize money received is not an ordinary income or statutory income as per section 6-5 and the section 6-10 of the Income Tax Assessment Act 1997. Therefore, it can be said the prize money should not be included in the assessable income.
The Taxation Ruling 97/11 provides indicators for determining whether the taxpayer is carrying on business. It is to be seen whether the activity have commercial purpose and the intention of the transaction to determine whether the activity can be regarded as business. In addition to this regularity of the activity should also be considered in making the decision whether the activity is business. However, as Jason is selling only personal furniture and no furniture is purchased from outside so there is no regularity of transaction. Based on the above discussion it can be conclude that Jason has engaged not engaged in business and the income should be included in the assessable income as a capital gain.
The Class Ruling 2002/83 deals with the income tax on science prizes. The Prime Ministers Prize for science is one of the prizes that are discussed under this ruling. The ruling provides that the prizes listed in the Para 3 of the ruling is not regarded as assessable income under section 6-5 of the section 6-10 of the Income Tax Assessment Act 1997. Therefore the receipts are exempted.
The back to school bonus and single income family bonus is paid under The New tax System (Family Assistance) (Administration) Act 1999 are the exempted government payments. Therefore, it can be said that receipt of family bonus is exempted.
The rent assistance received by the university student as a part of the youth Allowance benefit is exempted from tax.
The hospital should be within the meaning of Private Health Insurance Act 2007. The hospital should have physical presence in Australia and should satisfy the DGR test and prescribe law test. If all the conditions are satisfied then the organization is exempted from the income tax.
In the case of Heavy Minerals Pty Ltd v FCT (1966) 115 CLR 512, it was stated by the court that the compensation that is received by the taxpayer on the termination of the contract is an ordinary income. It is provided in the case that the receipt is taxable under section 25(1) of the Income Tax Assessment Act 1997.
The section 6-5 of the Income Tax Assessment Act 1997 states that the income that is received from ordinary concept is an ordinary income. The royalty payments of $4000 received from the sale of cookbook is taxable as ordinary income from personal exertion.
The accommodation voucher that is received by the taxpayer for setting up of the business is a consideration in lieu of cash. Therefore, the amount of $1000 accommodation voucher will be included in the assessable income as ordinary income under section 6-5 of the ITAA 1997.
The cash tip received is an ordinary income as section 6-5 of the Income tax Assessment Act 1997.
The Income Tax Assessment Act provides that the reward or small gifts should not be included in the assessable income. However, two conditions need to be satisfied. The first condition is that the gift amount should not be large. The second condition is that the gift received should not be in connection with the business activity. In this case, the gift amount is Luke receives $5000 for providing an investment plan. The Luke is a banker so it can be said that connection with the business activity. Therefore, it can be said that the cash amount received is not required to be included in the assessable income.
The dividend received is an investment income that is included in the ordinary income under section 6-5 of the ITAA 1997. Therefore the dividend income of $4000 should be included in the assessable income.
In this case, Sean was unable to attend office due to bullying by his coworker. For that he has received a compensation of $4000. This compensation amount is received for the loss of income that Sean has to suffer due to the inability to attend work. Therefore, it can be said that this should be included in assessable income. The reimbursement amount is not an income. Therefore, it should not be included in the assessable income. The selling of cigarette is a venture therefore the income that is received from the sale of cigarette should be included in the assessable income.
In this case, Christine supplied quarry to a local road contractor from an quarry. She is not engaged in the business of supplying quarry but the income that is generated should be included as the other income. Therefore, it can be said that the income of $5000 should be included in the assessable income.
The Sunshine Pty Ltd is engaged in the solar business. The company has received compensation amount from solar shop for terminating the amount. The compensation amount that is received for terminating the contract shall be included in the assessable income. On the other hand, the additional amount that has been paid is also an income and should be included assessable income.
Reference
Alghamdi, Abdullah, and Mahbubur Rahim. “Development of a Measurement Scale for User Satisfaction with E-tax Systems in Australia.” Transactions on Large-Scale Data-and Knowledge-Centered Systems XXVII. Springer Berlin Heidelberg, 2016. 64-83.
Edmonds, Mark, Christian Holle, and Wendy Hartanti. “Alternative assets insights: Super funds-tax impediments to going global.” Taxation in Australia 49.7 (2015): 413.
Gale, William G., and Andrew A. Samwick. “Effects of income tax changes on economic growth.” (2014).
King, Alexander. “Mid market focus: The new attribution tax regime for MITs: Part 1.” Taxation in Australia 50.10 (2016): 590.
Robson, Alex. “Australia’s carbon tax: An economic evaluation.” Economic Affairs 34.1 (2014): 35-45.
Sharkey, Nolan. “Coming to Australia: Cross border and Australian income tax complexities with a focus on dual residence and DTAs and those from China, Singapore and Hong Kong-part 2.” Brief 42.11 (2015): 41.
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