Robert Earnest has collected stamps for over 20 years. Although Robert has not acquired any since 19 September 1985, Robert has over 10,000 stamps. Recently, Robert had them valued and surprisingly, they were valued at $800,000. Robert decided to sell the collection and to facilitate this, Robert has engaged a sales and marketing agent to sell his collection. Robert has also spent $5,000 of his own money to pay for advertisement in magazines and online to promote the sale of his collection. Is Robert carrying on a business for tax purposes?

a. Yes,Robertiscarryingonabusiness

b. No, Robert is not carrying on a business. It is merely a hobby.

.Beatrice opens a savings account with a local credit union. The account was opened during a promotion for new customers. The credit union offered a $1,000 prize to one of its new customers. To be eligible, customers had to deposit a minimum of $1,000 and leave it in the account for a minimum of 6 months. Beatrice was the prize winner. Is Beatrices prize assessable as income?

a. No,Beatricesprizeisnotassessableasincome

b. Yes, Beatrices prize is assessable as income

29.A furniture manufacturer owned 6 factories and decided to close one of its factories. It arranged to demolish the factory, then extensively developed the land and sold it.

1. The proceeds from the sale of the land is assessable income as it is a receipt received by the manufacturer in return for performing work such as the development of the land.

2. The proceeds from the sale of the land is not assessable income as it is a once-off transaction.

3. The proceeds from the sale of the land is capital in nature.

4. The proceeds from the sale of the land is not capital in nature.

Select which statement above is correct.

1. Only(i)iscorrect.

2. Only (iii) is correct.

3. Both(ii)and(iv)arecorrect.

4. Both (ii) and (iii) are correct.

David and Shane sell insurance. As an incentive, the insurance company gives them a free holiday in the amount of $5,000 when they achieve a certain amount of insurance policies in a financial year. The holidays are non-transferrable and therefore cannot be sold. Is the holiday assessable income?

a. Theholidayisassessableincome. b. The holiday is not assessable income.