Case Study of Smith and Jones Samples for Students Myassignment

Question: Discuss the Case Study of Smith and Jones. Answer: Introduction Tax system of the country plays important role in rising government fund. The fun is utilized for the development of the country as well as for the essential expenditure of the country. The essential expenditure such as the infrastructure development, defence budget, and expense for maintaining the law and order within the country, helping the deprived and old people the government fund is used. The money collecting from the tax help in this matter and for this reason the government use to bring amendment in the taxation policy according to the need of the country. Main study The assessable income includes income as per the ordinary concepts is called as ordinary income. Section of ITAA 1997 includes in the assessable income of the taxpayer where the taxpayer is the resident of Australia. All the ordinary income earned by the taxpayer in and out of the Australia would be included in the assessable income during that period of time[1]. The capital gain tax is identified in the case of the Pre CGT land where, the asset is depicted to be considered as the pre CGT tax and is also not assessable to the nature of the tax. The enhancement of the tax can be easily determined by showing that the Pre-CGT tax is not applicable by showing the enhancement of the nature. The consideration can be easily identified as the enhancement of the motion which is being used for showing the structure of the work and also the cost of the base income for the Smith and Jones are depicted to be increasing in nature. This the figure simply depicts the implementation of the paragraph 104-10(5)(a) of the ITAA 1997 which is applicable to the case as per the undertakings are made[2]. Therefore the enhancement of the structure can be depicted by implementing the capital gain taxes on the income made from the grazing of the sheep on the land and on the improvement of the properties that are made on the land. As per the Assessable Income Tax Law, th e relevant income tax will be made on the capital gains as it is being seen in the activities continued by the Smith and the Jones. Therefore the structure clearly describes the appropriate format of the study and also the enhancement of the study can be made by showing the appropriate explanations to the case study as it is undertaken in this case[3]. Apart from this, the threshold of the result can be made by showing the development costs and the involvement of the income through out six years made by the Smith and the Jones. The aforementioned case study it is observed that Smith and Jones are property developer. They have purchased a property eight years ago, which has huge potential. The property is used for grazing purpose for the last six years and thenSmith and Jones have subdivided the land into 5 hectors blocks and sold the land to one purchase[4]. In this scenario as Smith and Jones are involving in the property development profession and they use the property for grazing for the last six years and then they trade the property; thus, as per the taxation rule in Australian taxation Office (ATO) they have to pay tax on the income they earned from the grazing and the enhanced value of the property to the government[5]. According to the law it must be considered as the ordinary income and the income tax rule should be applied for this case. The capital gain tax is also relevant for this case as the property during this year developed a lot and thus, the rate of the property has been increased a lot. In this situation Smith and Jones have to pay capital gain tax for the profit they make from the capital gain of the property. Conclusion The taxation system supports the essential government expenditure. According to the tax consequences the various types of taxes use to be imposed on the tax payers [6]. According to the undertaken case study both ordinary income tax and capital gain tax will be applied. References Cooper, Graeme S,Executing Income Tax(Australian Tax Research Foundation, 2008) Hurley, Annette,Tax Laws Amendment (Personal Income Tax Reduction) Bill 2008(Standing Committee on Economics, 2008) Krishna, Vern,Income Tax Law(Irwin Law, 2015) Mason, Tom,Income Tax Law(Taxation Concepts, 2012) Whittenburg, Gerald E, Martha Altus-Buller and Steven L Gill,Income Tax Fundamentals(1st ed, 2013) Woellner, R. H,Australian Taxation Law 2012(CCH Australia, 2013) Graeme S Cooper,Executing Income Tax(Australian Tax Research Foundation, 2008). Annette Hurley,Tax Laws Amendment (Personal Income Tax Reduction) Bill 2008(Standing Committee on Economics, 2008). Vern Krishna, Income Tax Law (Irwin Law, 2015). Gerald E Whittenburg, Martha Altus-Buller and Steven L Gill,Income Tax Fundamentals(1st ed, 2013). Mason, Tom, Income Tax Law (Taxation Concepts, 2012) Woellner, R. H, Australian Taxation Law 2012 (CCH Australia, 2013)