In the case of Westfield Ltd v FCT 91 ATC 4234; (1991) 21 ATR 1398: a) The money received from the sale of land was income as Westfield purchased the land with the intention of selling it for a profit. b) The money received from the sale of land was income as Westfield was in business and all transactions therefore had a profit-motive. c) The lease incentive received was ordinary income as such payments were part of Westfield’s ordinary course of business. d) The lease incentive received was ordinary income as although it was an isolated transaction, Westfield’s primary reason for entering into the transaction was to make a profit. e) None of the above. Copyright School of Taxation and Business Law UNSW 6
Recap of Wk 3 – sample MCQ
Jasmine is a 20-year old Australian resident. She is a full-time university student, but works part-time in a company owned by her parents. She earns $20 per hour (this is the same hourly rate that is paid to other employees who perform similar duties). During the year ended 30 June 2018, Jasmine is given a bonus payment of $1,000. This payment is given to all staff and was given due to the company earning higher than expected profits. For Christmas 2017 (i.e. in December 2017), Jasmine’s parents give her a new mobile phone valued at $800. They do not give Christmas gifts to other employees. Which of the following statements is most correct? (a) Neither the bonus payment nor the value of the mobile phone will be included in Jasmine’s assessable income as they were both given to her by her parents. (b) The bonus payment will not be included in her assessable income as it was a one-off payment. The value of the mobile phone will not be included in her assessable income as it was received for reasons unrelated to her employment. (c) The bonus payment of $1,000 will be assessable income to Jasmine (either under s6-5 or s15-2) as it is related to her employment. The value of the mobile phone will not be included in her assessable income. (d) The bonus payment of $1,000 will be assessable income to Jasmine (either under s6-5 or s15-2) as it is related to her employment. The value of the mobile phone will also be included in Jasmine’s assessable income under s15-2. (e) The bonus payment of $1,000 will be assessable income to Jasmine (either under s6-5 or s15-2) as it is related to her employment. The value of the mobile phone will also be included in Jasmine’s assessable income due to the operation of ss21/21A of the ITAA36.
Copyright School of Taxation and Business Law UNSW 7
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