Harriett is a New Zealand resident. She belongs to a family of talented artists and art collectors. Harriett earns income as a freelance writer of articles about the art world for various leisure magazines. The following events have occurred:

1. In 1996, Harriett inherited an original Rembrandt pencil sketch from her deceased aunt in the United Kingdom. Harriett’s growing anxiety over the security of the work in her Karori house, together with rapidly increasing insurance premiums, led her to sell the sketch. To get the best price for it, she sold it through Sotheby’s Auctions in London. Transportation of the sketch to the United Kingdom, including insurance for the journey, cost Harriett $NZ 27,500. The sketch sold for $NZ 3,480,500.

2. Harriett’s mother, the Molly, is a gifted oil painter. From time to time when Harriett is out of work, Molly gives some of her paintings to Harriett in return for Harriett doing Molly’s housekeeping each week. Both Molly’s and Harriett’s intentions are that Molly sells the paintings when Harriett is short of cash. This has occurred 4 times from 1 January 2020 to 31 July 2022. In total, Harriett received $86,700 from the paintings that she sold at auction through Dunbar Sloane Auctioneers in Wellington.

3. In August 2021, Harriett and her entrepreneurial uncle, George, devised a plan to monitor deceased estates in New Zealand over the next 12 months to identify potentially valuable art works, which could be acquired as investments that would be easy to sell if future cash needs arose. Execution of this plan resulted in the purchase of 8 watercolour paintings over the year, one of which cost $10,000 and was sold in March 2022 for $23,000.

Required:

Explain if the proceeds of sale of the artworks in (a)–(c) above are likely to be treated as income under any of sections CB 1–CB 5 of the Income Tax Act 2007 and, if so, how much is assessable income. Give specific section references to support your answers.