Taxation Theory, Practice & Law Literature & Language Paper (Other (Not Listed) Sample)
The report requires analyzing TWO australian taxation law case studies and also provide the calculations. tHE FIRST CASE STUDY NECESSITATED CALCULATION OF CAPITAL GAIN OR CAPITAL LOSS. The second case study required calculation of the fringe benefits TAX (fbt).source..
TAXATION THEORY, PRACTICE & LAW
The current study has focused on taxation structure of Australia. This report has discussed in which way capital gain or capital loss and fringe tax benefit has been calculated and which factor is taken into view. Along with that, this has also estimated the value of vacant land, shares and of many more things for estimating the value of net capital gain or net capital loss. On the other hand, FBT liability has been calculated for calculating so, perquisites have been calculated individually. However, it has been observed that FBT liability will be different for two different purposes but having the same purpose. At the end of this report, a conclusion has been provided highlighting the findings of the study.
Table of Contents
TOC \o "1-3" \h \z \u Introduction PAGEREF _Toc524532553 \h 3Question 1: Calculating the net capital loss or net capital gain of the client in the current year PAGEREF _Toc524532554 \h 3Question 2: Considering the case study of Rapid Heat Pty Ltd PAGEREF _Toc524532555 \h 8Calculating Fringe tax benefit of Rapid Heat PAGEREF _Toc524532556 \h 8Elaborating in which way the answer would differ if, Jasmine used $50,000 for purchasing shares PAGEREF _Toc524532557 \h 11Conclusion PAGEREF _Toc524532558 \h 13Reference List: PAGEREF _Toc524532559 \h 13Appendix: PAGEREF _Toc524532560 \h 13
Taxation can be said as, an important aspect for the government. The major source of income of the government is through tax collection. The current report will estimate the capital gain and capital loss of the client considering the information in the case study. However, for estimating capital profit or loss rule and regulation of Australian tax office will be followed. Along with that laws and legislation of Australian government will also be discussed. Along with that Fringe tax Benefit will be calculated assuming that the organization is titled to input tax credit. Various steps will be mentioned, which will point out steps required for calculating fringe tax benefit liability.
Question 1: Calculating the net capital loss or net capital gain of the client in the current year
Capital gain and capital loss are calculated for estimating the value of investment or fixed assets. Valuation of capital gain or capital loss may include value of patent property, gif, car or some other fixed assets. Taxation rate to be deducted from capital gain is 50%. The reason behind this is that client is a resident of Australia. Capital loss of one year is carried forward in another year. The amount can be deducted from another year also. However, Internal Revenue Service (IRS) allocates lower tax rate in case of long-term capital gain and allocates higher tax rate in case of short-term capital gains. However, taxation form 1040 treats both short-term and loss term capital gains equally (irs.gov, 2018).
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