CASE STUDY QUESTIONS FOR FINAL EXAM
CASE STUDY QUESTIONS FOR FINAL EXAM
16237 PROPERTY TAX SPRING 2023
QUESTION 1 (30 Marks)
(8, 11, 11 Marks allocated)
Theory Research Question ie there are no mathematical calculations tutorial questions from the various topics will assist with information.
A husband and wife own two residential, and one non residential investment property.
The income per annum from the two residential units is $55,000 and $30,000 being a combined rental income of $85,000. The commercial property income is approximately $60,000 per annum.
The husband and wife decide to place one of the investment residential units on the market. After a successful auction campaign, the property is sold.
Two months later the husband and wife decide to place the commercial property for auction. The property is successfully sold prior to the auction.
Discuss any ABN and any GST requirements (or implications) for the husband and wife (exclude information required to be discussed in items b) and c) listed below.
(8 Marks)
Discuss any ABN and GST implications for the sale of the residential unit. (11Marks)
Discuss any ABN and GST implications for the sale of the commercial property.
(11 Marks)
QUESTION 2 (20 Marks)
Research and Mathematics tutorial questions from the topics and text book will assist with information.
John sold his consultancy practice and his 4 bedroom family home in Perth, Western Australia during 2022, and planned to move to the Entrance in New South Wales on the 10th July 2022. However, due to COVID 19 border restrictions, John and his family were not able to cross the border and rented a house in Western Australia, waiting for the borders to re-open. During December 2022, John and the family were able to relocate when the borders were opened.
John had originally purchased the consultancy practice on the 17th May 2006 for $265,000. He entered into a contract on the 10th May 2022 to sell the consultancy practice for $650,000. Other expenses relating to the sale (legal fees, agents commission, advertising) amounted to $25,000. Included in the sale of the consultancy practice was all the equipment necessary to continue operating the business. John continued to operate the business until the sale was settled.
Johns main residence in Western Australia was originally purchased for $440,000 on 19th July 1997. It was subsequently sold on 17th May 2022 for $850,000. Legal expenses and agents commission fee plus advertising totalled $34,000.
Between 2019 to 2022, John was not well, and it was difficult for him to drive to his consultancy practice, so he occasionally used two rooms from his 4 bedroom family home to carry out the work for his practice.
Advise John on the following tax issues:
Discuss and provide reasons, whether or not any capital gain is applicable. Include any calculations where necessary. (10 Marks)
Discuss any requirements, with regards to ABN and GST. Where applicable also include reasons (10 Marks)
QUESTION 3 (30 Marks )Capital Gains Calculations
Mathematical and similar to Topic 14 (e.g. 7, 8, 9, 10, 11, 12 questions etc )
i.e. other method, frozen indexation, discount method
QUESTION 4, (20 Marks)
(5, 5, 5, 5)
Miscellaneous Capital Gains and GST Each part is a short style answer of probably no more than about 50 to 80 words.
