Income
11. A receipt can be seen asâincomeâ in one of two ways. What are they?
12. What is âordinaryincomeâ?
What is âstatutory incomeâ?
What is the relationship between assessable income, ordinaryincome and statutory income?
What is the role of Div. 10?
What is the effect of s 15-2?
What is the effect of s 15-15?
What is meant by âincome must be derivedâ?
When is income âderivedâ?
Define a âwindfall gainâ.
Briefly explain what âmutual paymentsâ are and how they aretaxed.
A sporting club receives income from membership subscriptions,hire of its facilities and bar takings in its clubhouse. To whatextent are these receipts taxable?
Briefly explain when gambling winnings will be taxable.
Briefly explain when gifts will be taxable.
A plays club football in the North Queensland League. Last yearhe was named as the Leagueâs Best and Fairest player and received a$5,000 prize donated by a local television station. Explain whetherhe is taxable on his prize.
In what circumstances will a compensation payment be regarded astaxable income?
B received $1,000,000 for heroin he had illegally imported intoAustralia. The heroin had cost him $200,000. To what extent, if atall, is he liable for tax on his âprofitâ?
If B is taxable on that profit can he claim the bribes he paidvarious overseas customs officials as deductions?
As part of her salary package, C receives the use of a companycar. She estimates that the value to her of the company car is$5,000 per year. To what extent, if at all, is she assessable onthat value?
To what extent, if at all, is her employer assessable to taxbecause it provides her with the car?
How are loan premiums and discounts treated for income taxpurposes?
How are premiums that tenants pay their landlords assessed inthe landlordâs hands under the income provisions of the Income TaxAssessment Acts?
A farmer subdivides his farm into housing blocks and sells themat a substantial profit. To what extent, if at all, are theproceeds of those sales assessable income in his hands? Why?
Trading Stock
How are purchases and sales of trading stock treated fortaxation purposes?
What impact does a change in trading stock levels between thestart and end of an income year have on your taxable income?
What are your options in valuing closing stock for taxationpurposes?
Can you change your valuation mechanism for closing stock fromyear to year?
What is the relationship between opening stockin tax year 1 and opening stock in tax year 2?
What is the relationship between closing stockin tax year 1 and opening stock in tax year 2?
General Deductibility
The ITAA 97 contains two principal provisions governingdeductibility. What are they?
What are the two (2) positive limbs of s.8-1?
What is the difference between the situations in which the firstpositive limb applies and the situations in which the secondpositive limb applies?
What are the four (4) negative limbs of s.8-1?
Explain when each of the four negative limbs will operate todeny deductibility?
If you are looking for a provision denying deductibility to anoutgoing (under the 4th negative limb) where would youlook for it?
In general terms it can be said that there are three (3)âclassesâ of provision in the ITAA that deal with the question ofdeductibility. What are they?
What is the role of Div 12?
Briefly explain the âessential character testâ forclassification of outgoings.
What other tests are used to classify losses and outgoings aseither deductible or not deductible? How do those testsoperate?
A competition body builder is placed on a high protein andcarbohydrate diet by his coach. To what extent, if at all, are thecosts of his dietary requirements deductible against his income asa professional bodybuilder?
Deductibility of Specific Expenses
To what extent, if at all, are the following expenses deductibleagainst assessable income:
(a) travel expensesbetween home and work;
(b) travel expenses between twoplaces of employment;
(c) the costs of leavingoneâs children in child care while one is at work;
(d) self educationexpenses;
(e) home officeexpenses;
(f) work relatedclothing;
(g) fines and penalties;
(h) prepaid expenses.
To what extent, if at all, is HECS deductible?
What is the practical effect of s 82A of the ITAA1936?
G spends $200 entertaining potential clients at dinner. To whatextent, if at all, is this amount deductible?
