Question
On 1 July 2019 Wills, a bricklayer, sold a one tonne truck to his brother-in-law, Burke, a cartage contractor, for $20,400. Wills had previously attempted
On 1 July 2019 Wills, a bricklayer, sold a one tonne truck to his brother-in-law, Burke, a cartage contractor, for $20,400. Wills had previously attempted to sell the truck to dealers but the best offer received was $20,000. The truck had originally cost Wills $50,000 and he had obtained deductions of $40,000 for depreciation during his period of ownership. In the course of the second week of July 2019, the tray of the truck collapsed while carrying a heavy machine. A new tray was constructed and fitted at a cost of $12,500.
Advise Wills and Bourke as to the amounts which are either assessable as income or alternatively allowable as deductions. Ensure you state the legislation, tax rulings or common law principles which may be applicable.
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