20 . Morag is an international student who commenced studying for a 3-year Bachelor of Finance degree at an Australian university in March 2022. She intends to return to her home country when she graduates. Morag works 10 hours per week at a local fish and chip shop and wants to know whether she is classified as a resident for Australian income tax purposes. Which is the correct statement?

Select one:

a. Morag will only pay tax if she works full time.

b. Morag will pay tax in Australia only if she stays here more than 3 months.

c. Morag is not a resident for Australian income tax purposes.

d. Morag does not have to worry about tax.

e. Morag is a resid

22. Whilst cycling home from work Matt was hit by a car and seriously injured. He spends three months in hospital. Due to the severity of his injuries, mark is unable to return to work. He commences legal proceeding and receives $500,000 for pain and suffering, $25,000 for past and future economic loss, $20,000 to cover medical expenses and $2,500 to cover the cost of a new bike. What amount is regarded as ordinary income?

Select one:

a. $25,000

b. $47,500

c. $525,000

d. $500,000

e. $547,500

23. Kerrie is a farmer and has hardwood timber growing on 10 hectares of her land. She does not tend the timber for sale and the timber was growing on the land when she purchased the land in 2006. In the current year of income Kate entered into an arrangement with Jack, a timber merchant, for the sale of the timber. The agreement with Jack provided that Kate sell all the timber to Jack and that Jack has the right to cut and remove the timber from the land. Jack agreed to pay Kate $20,000 on signing the contract on 4 September 2018 and also to pay her $50,000 for each of the next three years. Jack will make the payments even if he does not harvest the timber. Based on this transaction, what amount should Kate bring to account as royalty income in the current year?

Select one:

a. $30,000

b. Nil

c. $50,000

d. $170,000

e. $20,000

24. Kate had been interested in planting macadamia nut trees on her five hectare farm on the Sunshine Coast in Queensland since she purchased the property in 1998. In 2001 Kate had some discussions with an agronomist from the Department of Primary Industries about whether macadamias would grow on her land. In 2002 she planted a trial plot of 20 trees to determine how they grew on the land. The results of the trial were very promising and in 2006 she planted a commercial number of trees on four hectares of her land. In 2019 she commenced harvesting the first commercial crop from the trees. In which year would you consider that she has commenced a business of macadamia nut production?

Select one:

a. 1998

b. 2006

c. 2001

d. 2002

25. Which of the following statements is least likely to lead to a conclusion that the taxpayer was undertaking the mere realisation of a capital asset in respect of a block of land ?

Select one:

a. The taxpayer developed the land to the extent necessary to get local council approval and no more.

b. The taxpayers set up their own on-site sales office to assist with the sale of the blocks of land.

c. The taxpayer continued his or her normal business activities and was not directly involved in the sale of the land.

d. The land was sold simply by listing it with a local real estate agent.

e. The land was surplus to the taxpayer's needs in carrying on the taxpayer's manufacturing business.

26. What is significant about s 51(ii) of the Australian Constitution?

Select one:

a. This section provides that customs and excise duties can only be imposed by the Commonwealth.

b. This section provides that the States have power to override Commonwealth income tax legislation.

c. This section provides that laws dealing with Taxation are split between the States and the Commonwealth.

d. This section provides that the Commonwealth has power to make laws with respect to taxation, but not so as to discriminate between States or Parts of States.

e. This section provides that laws imposing taxation "shall deal only with the imposition of taxation" and "shall deal with only one subject of taxation only".

A builder helps you on weekends to erect your home. He does so on the basis that after the building is completed you will give him your caravan which you are living in whilst the house is being built. You purchased the caravan for $14,000 in January 2000. Assume the value of the builder's work was $13,500 and the caravan had a market value of $15,000 when you handed it over on January 1 2019. The transaction does not give rise to 'income". Is this statement True or F Select one: True False