Question 1

1pts

Sharon, a world-class tennis player, is a resident of Australia and competes in her sport on a full-time basis. She received $34,000 for product endorsements, $27,000 in appearance fees and $56,000 in match winnings during the year ended 30 June 2019. In addition, she was awarded a cash prize of $4,000 on 4 May 2019, plus a trophy worth $5,000 for being the best Australian female tennis player for the year. What amount should she include in assessable income for the year ended 30 June 2019?

a) $121,000

b) $126,000

c) $56,000

d) $61,000

Flag this Question

Question 2

1pts

Daniel is an investor who invests in both the share market and property, including residential and commercial property. He owns a retail complex that has 20 retail outlets and has just entered into an agreement with all 20 tenants to receive total rental payments of $1.5m per year in rental income for the next five years. Daniel recognised that the right to the future income was a valuable right and decided to sell the rights to the future income to Finance Ltd for $5m that represented the net present value of the future income stream. He received the $5m in the current year. On the assumption that the principle in theMyer Emporiumcase applies, what amount should Daniel include in his assessable income in the current year of income?

a) $1.5m

b) $7.5m

c) $3.5m

d) $5m

Flag this Question

Question 3

1pts

Kate entered into negotiations to sell her contract cleaning business to Jack on 1 March 2019. She initially asked Jack to pay her $450,000 for the business but he finally agreed to pay her $420,000 for the business and $25,000 for her agreement not to open up a similar business for the next four years in the same town. They signed two separate contracts: one for the sale of the business on 4 April 2019, and one for the agreement not to trade for four years on 16 April 2019. Kate received the $420,000 on 4 May 2019 and the $25,000 on 16 May 2019.

Which CGT event is applicable to the agreement to sell the business and what is the date of the CGT event?

a) CGT event A1 and 4 April 2019.

b) CGT event D1 and 16 May 2019.

c) CGT event D1 and 16 April 2019.

d) CGT event A1 and 16 April 2019.

Flag this Question

Question 4

1pts

Which of the following statements in relation to assessable income ismostcorrect?

a) The proceeds from selling illegal drugs are unlikely to be assessable income.

b) An old age pension paid to a pensioner by the government is not ordinary income.

c) Payments to a volunteer respite carer to cover the expenses of providing care to persons with disabilities are not income.

d) A payment received by an employee from an employer to compensate them for the loss on the sale of their private home will be ordinary income.

Flag this Question

Question 5

1pts

Jack acquired a rental property on 1 March 1988 for $175,000. On 20 June 2019 he sold the property for $330,000. Legal fees on purchase were $1,000 and the legal fees on sale were $1,750. Jack incurred $25,000 for the building of an extension to the property on 2 September 1992. What is Jack's capital gain arising from the disposal, minimising any gain if possible? (Assume that Jack had no other CGT transactions during the year and had no carried forward capital losses).

a) $63,625

b) $127,250

c) $24,979

d) $49,781

Flag this Question

Question 6

1pts

In relation to compensation payments, which of the following statements ismostcorrect?

A. A compensation payment cannot be dissected into different components.

B. Where a taxpayer accepts a lesser amount of compensation for several un-liquidated claims, the courts are happy to dissect the compensation payment into its different components.

C. A right to claim compensation may constitute a capital gains tax asset.

D. Where a compensation payment includes an income and capital amount, the whole amount will be considered to be income.

Flag this Question

Question 7

1pts

Which of the following statements ismostcorrect?

a) The most common type of income from property is the proceeds from selling capital assets.

b) Interest income is derived from the use of money.

c) The returns from an annuity are capital in nature.

d) Rent is generally statutory income.

Flag this Question

Question 8

1pts

Which of the following items isnota separate CGT asset for the purposes of Subdivision 108-D ITAA97?

a) A building or structure built in June 1999 on pre-CGT land.

b) A building or structure built in June 1999 on post-CGT land for which a balancing adjustment would apply on disposal.

c) A depreciating asset that is part of a building or structure on post-CGT land.

d) A capital improvement to a pre-CGT asset that cost $46,000 in 1999.

Flag this Question

Question 9

1pts

In relation to business income, which of the following statements ismostcorrect?

a) The proceeds from the mere realisation of an investment or an income earning property are not always ordinary income.

b) The proceeds from the sale of land purchased in 1986 to carry on a farming business will be ordinary income.

c) A lessor's contribution to the cost of a shop fit-out as a lease incentive will always be ordinary income.

d) If a business earns an amount from an unusual or one-off transaction it will not be assessable income.

Flag this Question

Question 10

1pts

James runs a retail store selling hardware items to the public. He provides the following information in relation to his trading position to enable you to calculate his income on the assumption that he is using the accruals method of accounting:

• Trade debtors as at 30 June 2018: $40,000
• Cash receipts during the year ended 30 June 2019: $570,000
• Trade debtors as at 30 June 2019: $70,000

Assuming that James is using the accruals method of accounting, what is his assessable income from trading for the year ended 30 June 2019?

a) $600,000

b) $570,000

c) $640,000

d) $610,000