Part 2 Ballarat Bird Sanctuary operates a bird park for tourists. Birds are purchased for display in the tourist park. The birds are kept in cages and do not perform tricks. They are not for sale generally but may sometimes be sold if there is a large population explosion of a certain type. Generally, the natural increase of the birds corresponds with deaths and escapes. The birds are only acquired to increase the variety on display. Required: Discuss whether the birds can be considered trading inventory, with reference to relevant rulings and income tax legislation.

REMARKS:AUSTRALIA TAX RATE)

Q1. Part 2 Ballarat Bird Sanctuary operates a bird park for tourists. Birds are purchased for display in the tourist park. The birds are kept in cages and do not perform tricks. They are not for sale generally but may sometimes be sold if there is a large population explosion of a certain type. Generally, the natural increase of the birds corresponds with deaths and escapes. The birds are only acquired to increase the variety on display. Required: Discuss whether the birds can be considered trading inventory, with reference to relevant rulings and income tax legislation. (5 marks) (Total: 12 marks) Note: Maximum length for Q1 is 1 page