MAX is a professional basketball player. On 1 January 2021, he entered into an eight year contract to play basketball for the Adelaide All Stars. Under the contract, MAX agrees to play in all of the club's matches, provided that the coach selects him and he is fit to play. After signing the contract the All Stars pay MAX $300,000. The All Stars also agree to pay MAX $4,000 each month for his living costs. There is no requirement for MAX to repay any of the $300,000 if he fails to play because he is not selected or he is not fit to play.

Advise MAX whether he has to include the full amount of the contract monies received in advance in his assessable income for the 2020/2021 income year. Refer to case law, statutory provisions and tax rulings in your answer.

(According to Australian law)

In marking your assignment, your lecturer will place emphasis on whether you have demonstrated an ability to:

Identify and appropriately explain the range of tax issues connected with the fact scenarios posed in the questions

Apply case law, legislation, and tax rulings (where appropriate) to the fact scenarios posed in the questions