Question 5(15 marks)

Discuss the assessability of the following amounts (ignoring the capital gains tax):

a) Chen is a salesman employed by a large company. The company provides free tickets to various events to salespeople who exceed their monthly sales targets. Chen exceeds his monthly target and his employer awards him a theatre ticket valued at $100. What would be the position had he been a non-employee agent? (5 marks)

b) In 2005 Chen bought land in Brisbane Australia in order to establish a large commercial warehouse for storing goods. However, the Council changes the zoning of the land from commercial to residential. Chen decides to sell the land and is considering whether to sub-divide the land to maximise his return. Advise him as to whether and in what circumstances the proceeds from the sale of the property might be treated as assessable income (ignore capital gains tax). (5 marks)

c) Chen wins $70,000 in a single year from online gambling. He spends 20 hours per week gambling using a gambling method that he has devised. He keeps records of all his gambling transactions. Is the $70,000 assessable for income tax? (5 marks)