TAXATION LAW AND COMPLIANCE INDIVIDUAL ASSIGNMENT
Question 1 -
Mary Jackson is a marketing consultant and on 10 February 2016 she was relocated to Brisbane. In order to facilitate the move, her employer Elite Retail paid $4,000 for transfer of furniture.
Her annual salary is $120,000 and Elite Retail paid Mary an entertainment allowance of $5,000 to help cover the cost of entertaining her clients. In addition to the above her employer has provided her with the following benefits:
- A laptop valued at $2,400 and a mobile phone valued at $800.
- Home telephone bill of $330 of which 50% were work related.
- A company car Mazda 3. The on-road cost of the car is $30,000.
- $1,500 allowance to cover professional subscriptions.
- A low-interest loan of $500,000 at 4%. This was used to finance her new property in Brisbane.
Advise Mary and Elite Retail of the tax consequences of the above benefits received by Mary.
Question 2 -
Scott is an accountant who purchased a vacant block of land in Brisbane on 1 October 1980. On 1 September 1986, Scott built a house on the land. At the time, the land was valued at $90,000 and the cost of construction was $60,000. The property has been rented out since construction was completed. Scott sold the property for $800,000 in March 2016.
In February 2005 he purchased a painting for $16,500. The painting was stolen on 15 September 2015, and it was not insured by Scott.
Requirement:
a) Based on the information above, determine Scott's net capital gain or net capital loss for the year ended 30 June of the current tax year.
b) How would your answer to (a) differ if Scott sold the property to his daughter for $200,000?