Question
Taxation Two teenagers bored during a covid lockdown, decided rather then focus on the negative effects of a lockdown, to jump on a 'once in
Taxation
Two teenagers bored during a covid lockdown, decided rather then focus on the negative effects of a lockdown, to jump on a 'once in a century business opportunity'. They began to sell brainteaser puzzles in Australia , thinking to try and make a few bucks, but what happened far exceeded what they were expecting. Within a month they made a sweet $70k. Not bad for an 18 and 19-year-old at all.
Although the partners were not expecting this business to take off like it did, they still intended to make money which their venture. Therefore, the $70k and future potential earnings that they will make, will be classified as ordinary income of business, which is taxable.
If the main intention initially was not to make a profit, would that mean that if in the future, if some money was to be made, would it be income of business?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started