QUESTION 10 Which of the following taxpayers are entidled to use the cash accounting method to report assessable income for tax purposes? a) An investor receiving interest income b) An employce. c) An investor receiving rental income. spie trading tax agent with no employees that receives $20,000 per annum from preparing individual tax returns. e) All of the above. QUESTION 11 Which of the following characteristics is least likely to indicate that a business exists? a) The taxpayer's activities are well organised b) The taxpayer expects that the expenses from the activity will be greater than the income derived from the activity over time. c) The production from the activity is well in excess of domestic consumption. d) The taxpayer has introduced a simple invoice and bookkeeping system e) The activities of the taxpayer are sustained, regular and frequent. QUESTION 12 Sandy is employed part-time by a firm of engineers and receives a salary of $25,000 per annum. On 1 July 2015, Sandy purchased a farm for $250,000 and planted 500 Macadamia Nut trees at a cost of S12,000. She expects the venture to be profitable when the trees mature in 5 years time. For the year ended 30 June 2016 no income was received and the venture reported a $10,000 loss for taxation purposes. Which of the following statements is most representative of the taxation treatment of Sandy's loss from the venture in respect of the 2016 year? The loss can be offset against her salary income. a) b) The loss cannot be offset against her salary income as the venture representsa c) The loss cannot be offset against her salary income as it represents a "non- d) The loss cannot be offset against her salary income as only losses from e) Sandy must apply for the Federal Commissioner of Taxation's discretion to hobby and not a business. commercial loss" by virtue of Div. 35 of the Income Tax Assessment 1997. investments can be offset against salary income. allow the loss to be offset on the basis the venture will be profitable in a commercially viable period