Q1: Anchor Pty Ltd owns one of Australia's major TV stations. One of its flagship shows is a current affairs style program which airs rightly across the country. During the year ended 30 June 2020 it incurred the following expenditure:

• Paid compensation of $40,000 to a local building company for defamatory remarks one of its reporters made whilst airing a story on sub-standard building practices.
• Paid $10,000 to the reporter in the building story to encourage him to terminate his contract of employment early, due to unsatisfactory performance.
• Paid $5,000 refund to an advertiser who had withdrawn their support due to being an associate of the building company. This amount had been previously recorded as advertising sales for the station.

Based on the above losses or outgoings, what amount will be deductible under s 8-1 ITAA97?

a) $55,000

b) $40,000

c) $15,000

d) $50,000

e) Nil

Q2: For the year ended 30 June 2020 which of the following CGT assets is not taxable Australian property?

a) Land situated in Australia

b) A share in an Australian private company where the shareholder holds 25% of the issued shares and the only asset of the company is a commercial property in Sydney.

c) An asset used in carrying on a business in Australia.

d) An antique cabinet owned by an Australian resident living in Australia and held for private use.

e) A share in an Australian public company where the shareholder holds 15% of the issued shares and 60% of the market value of the company is represented by the value of land in Perth owned by the company.

Q3: Which of the following transactions will give rise to an assessable capital gain?

a) Tom sold 500 shares in BHP for $30 per share on 5 August 2019 that he had purchased for $25 per share on 16 October 2015.

b) Anna bought a car on 6 April 2018 for $18,000 and sold it for $20,000 on 10 May 2020.

c) Janet won a house on the Gold Coast worth $650,000 in a charity raffle on 2 April 2020. She now lives in the home with her husband and two children.

d) Mark is a property developer who builds and sells houses to make a profit. He sold one property on 17 March 2020 for $580,000 which had cost him $370,000 to build.

c) Michelle injured her back in an accident at work and received compensation proceeds of $20,000 for the injury.

Q4: Which of the following amounts is most likely to be ordinary assessable income under s 6-5 ITAA97?

a) An employee was reimbursed by his employer for expenses incurred by the employee as part of his employment.

b) A capital gain derived by a property investor from the sale of a rental property that he had held for eight years as an investment property.

c) A mining company received a reimbursement of an overpayment of royalties previously paid for mining rights. The amount had been claimed as a tax deduction by the company in an earlier year of income.

d) An amount received from a lottery win by an individual taxpayer who regularly enters lottery competitions.

e) An amount paid by a taxpayer as an adjustment for rates when they purchased a rental property.