BTF3931 Study Guide - Final Guide: Ordinary Income, Capital Gains Tax, Westpac

• School: Monash University
• Department: Business - BTF
• Course: BTF3931
• Professor: Johnathan

Document Summary

(ordinary income) income from personal services and employment (w5) (legislation: sec 6-5 and sec 15-2 of itaa97) Overview: receipts from employment/personal service = income tax or fbt, ordinary income (sec 6-5 itaa97, allowances and other things provided in respect of employment or services (sec 15-2) Income from personal exertion: rewards from services nexus: a (cid:272)o(cid:374)(cid:374)e(cid:272)tio(cid:374) (cid:449)ith a (cid:396)e(cid:272)eipt (cid:396)esulti(cid:374)g f(cid:396)o(cid:373) a ta(cid:454)pa(cid:455)e(cid:396)"s pe(cid:396)so(cid:374)al se(cid:396)(cid:448)i(cid:272)e (cid:272)o(cid:374)stitute to ordinary income: Wages (clear nexus = ordinary income) gifts (no nexus = not ord) Courts have used a 2 step approach to determine if an amount is ordinary income from personal services: Identification of the activity undertaken and: determining whether the receipt is a reward for performing that particular activity. Ordinary income as a reward for nexus (determined by the courts) Salary and wages e. g. brent v fct 1971 taxpayer was wife of a famous criminal sold story payment is ordinary income from provision of personal services assessable under s6-5(1)