Sunday, December 8, 2019
Case Study Ordinary Income
Question: Case Study Ordinary income Answer: i)Californian Copper Syndicate Ltd v Harris (Surveyor of Taxes) (1904) 5 TC 159 Through analyzing this case, we can conclude that the primary objective of the organization California Copper Syndicate was to get the land which consists copper. After getting the land, the company did not extract or remove copper from it. Moreover, the organization sold the property to another organization (Cebi and Woodbury, 2013). The verdicts of the court was that the group needs to pay the income tax for the agreement as the organization's intension was to produce the capitals or the money to trade the land or the property. This is not a capital gain and should be considered as the ordinary income of the organization on which taxes are bound to be levied (Taylor, 2011). ii) Scottish Australian Mining Co Ltd v FC of T (1950) 81 CLR 188 As per the case given over here, it can be seen that a business organization has established a business of coal mining. After a certain point of time, the fuel was strictly removed, and the group decided to sell the land or the property to produce the money from the trade. To makes the deal more profitable the group needed to subdivide the land and also to build roads in order to make it much more profitable (Coan, 2008). The verdict of the court was that the organization by subdividing the land can benefit a lot. In this particular case the firm is not liable to pay any taxes as it did not ultimately sell the land (Freebairn, 2008). iii)FC of T v Whit fords Beach Pty Ltd (1982) 150 CLR In this case, the tax payer is a firm or an organization, which gets an undeveloped land at the white fords beach. This property or land was located at the faade of the beach, and it could easily be utilized for the purpose of fishing. However, after a certain point of time, for the betterment of organization the difficult shares of the organization or the company were sold. After that, the new shareholders procured the land since they obtained the power of the management of this land and it is, in general, to increase the profitability the fresh shareholders need to subdivide the land and sell (Gunter, 2013). But during this time a disagreement arose amongst the shareholders about whether they need to add the share of their profits to the ordinary income or not. In general, the verdict of the court was that the shareholders can use the land in order to generate revenues for themselves. As a result of this, the organization or the firm established another organization of land develop ment, the income of which will fall under the category of ordinary income as per the Section 26(a) of ITAA (1983) (Heng, Niblock and Harrison, 2015). The court verdicts were that the profits or the income is assessed as a simple or an ordinary income and also need to be assessed as a regular or a single income. iv) Statham Anor v FC of T 89 ATC 4070 This case in this context is closely related to income tax system. In this case, the income tax was assessed for quite a long period of time. However, the decision was furnished that also need to the commissioner that is regulating the estates the profits or the income (KINGSTON, 2006). This is a simple or ordinary profits or the income and also need to be imposed to the law of the Income tax of this state. v) Casimaty v FC of T 97 ATC 5135 In this case the features and conditions associated for decreasing profit can be recognized (Leigh, 2007). Here the person under consideration endeavors to earn an amount of profit by selling a part of the land owned by him. The issue is whether the individual would have to pay taxes for the amount of money earned by him or not. This type of disagreement was mostly arising due to the exact reason if the income or the profit he gains from this type of trade that is assessable for the purpose of the tax or not. According to the Australian Taxation Act Section 25(1) of ITAA (1983) the agreement that was assessable and needs to be added in an ordinary or a simple income. vi) Moana Sand Pty Ltd v FC of T 88 ATC 4897 In this scenario, here also we can say that an organization was dealing with sand was keeping a property or the land to remove the sand from the land. Moreover, the land or the property was a trade to give birth to this disagreement which is closely related to the taxable amount (Lim, 2009). The verdict of the court was that the property or the land needs to be traded for only commercial purpose. It also said which the property or the land may be purchased by the other person, who will mostly used it for the business reason. Generally, to the Act is needed to be measured as ordinary or the single income (Strully, Rehkopf, and Xuan, 2010). vii) Crow v FC of T 88 ATC 4620 This scenario is related to a farmer, who is the taxpayer here. Here, we can see that the farmer was tried to buy a grazing field of land. Moreover, there was a general disagreement about the property. However, it also is also understood that this property or the land was an offer to the farmer (Liu and Arnold, n.d.). Depending on the scenario; it need not still be added in a single income or the profits or income tax deductable and provisions under this subsection 51(1) ) of ITAA (1936). It is a crucial subject matter to the provisions of the capital gain. viii) McCurry Anor v FC of T 98 ATC 4487 In this scenario, it was a land or the property possessed by the two brothers. Moreover, theres present some homes on that land to renovate this land the homes of the land need to be removed. The deviation aroused though this two brothers must need to pay their tax that is closely related to the land (Rodger, 2008). The result was in the proper support of these two Australian brothers besides the court ordered while this two Australian brother need not be require to compensate their tax for the property or their land also. References .DREW, M. (2006). Superannuation: Switching and Roulette Wheels.Australian Accounting Review, 16(38), pp.23-31. Basu, A. and Andrews, S. (2014). Asset Allocation Policy, Returns, and Expenses of Superannuation Funds: Recent Evidence Based on Default Options.Australian Economic Review, 47(1), pp.63-77. BATEMAN, H. (2006). Recent Superannuation Reforms: Choice and Flexibility in Retirement.Australian Accounting Review, 16(38), pp.2-6. Bennmarker, H., Calmfors, L., and Seim, A. (2014). Earned income tax credits, unemployment benefits, and wages: empirical evidence from Sweden.IZA J Labor Policy, 3(1). Cebi, M. and Woodbury, S. (2013). HEALTH INSURANCE TAX CREDITS, THE EARNED INCOME TAX CREDIT, AND HEALTH INSURANCE COVERAGE OF SINGLE MOTHERS.Health Econ., 23(5), pp.501-515. Coan, J. (2008). The Value of Proposed Earned Income Tax Credits to the Office of Child Support Enforcement's Caseload: A Comparison and Recommendations.Politics Policy, 36(5), pp.806-833. Freebairn, J. (2008). Comment: on The Economics of Superannuation'.Australian Economic Review, 19(3), pp.87-88. Gunter, S. (2013). State Earned Income Tax Credits and Participation in Regular and Informal Work.National Tax Journal, 66(1), pp.33-62. Heng, P., Niblock, S. and Harrison, J. (2015). Retirement policy: a review of the role, characteristics, and contribution of the Australian superannuation system.Asian-Pacific Economic Literature, 29(2), pp.1-17. KINGSTON, G. (2006). Choice of Tax Regime for Superannuation Contributors.Australian Accounting Review, 16(38), pp.41-46. Leigh, A. (2007). Earned Income Tax Credits and Labor Supply: New Evidence from a British Natural Experiment.National Tax Journal, 60(2), pp.205-224. Lim, Y. (2009). Can refundable state Earned Income Tax Credits explain child poverty in the American states?.Journal of Children and Poverty, 15(1), pp.39-53. Liu, K., and Arnold, B. (n.d.). Australian Superannuation Outsourcing: Fees, Related Parties, and Concentrated Markets.SSRN Electronic Journal. Rodger, A. (2008). The Economics of Superannuation.Australian Economic Review, 19(3), pp.75-86. Strully, K., Rehkopf, D. and Xuan, Z. (2010). Effects of Prenatal Poverty on Infant Health: State Earned Income Tax Credits and Birth Weight.American Sociological Review, 75(4), pp.534-562. Taylor, S. (2011). Captured Legislators and Their Twenty Billion Dollar Annual Superannuation Cost Legacy.Australian Accounting Review, 21(3), pp.266-281.