Letg 5551 Mid Session Exam Sample

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UNSW
THE UNIVERSITY OF NEW SOUTH WALES

AUSTRALIAN SCHOOL OF BUSINESS

SCHOOL OF TAXATION AND BUSINESS LAW

LEGT 5551 - TAXATION LAW

SAMPLE CLASS TEST QUESTIONS

Summer, 2011

Note: You must bring this document to the Week 7 lecture

This document is protected by copyright law. This document was prepared by Dale Boccabella, with contributions from Tom O’Sullivan, in the School of Taxation and Business Law, for the private use of students undertaking the Taxation Law course at UNSW. No other use should be made of the information contained in this document, and in particular, unauthorised copying is expressly forbidden without prior permission from Dale Boccabella.

© 2011: UNSW, The School of Taxation and Business Law and Dale Boccabella

SAMPLE OR EXAMPLES OF THE STYLE OF MULTIPLE CHOICE QUESTIONS THAT WILL APPEAR IN THE MID SEMESTER CLASS TEST

Suggestion

You should defer looking at these questions until you have completed (or at least, “nearly” completed) your preparation for the mid-session class test. Importantly, you should attempt these questions under class test conditions, which includes a closed book situation. In this regard, allow yourself about seven minutes per question.

Feedback on Questions

The lecturer will address these questions in the lecture in Week 7. Please ensure that you bring these questions with you to the lecture in Week 7. To get a realistic assessment of the skill level you have reached, you must attempt these questions before the lecture in Week 7 under class test conditions.

SAMPLE CLASS TEST QUESTIONS

QUESTION ONE

Rhonda, aged 34, is a resident Australian taxpayer and she is single. Rhonda does not have private patient hospital health insurance. Further, Rhonda does not have a HELP debt. However, Rhonda does have a tax offset of $10,000 for the 2010-11 income year. The following tax information is relevant to Rhonda in regard to the income years listed in the table:

| |Assessable Income, Aside from | | | | | |Capital Gains |Current Year Capital Gain | | | |Income Year | |(*) |Current Year Capital Loss |Current Year Deductions | |2007-08 |$57,000 |$23,000 |$19,600 |$24,300 | |2008-09 |$70,000 |$120,000 |$10,000 |$250,000 | |2009-10 |$90,000 |$20,000 |$50,000 |$50,000 | |2010-11 |$190,000 |$40,000 |$20,000 |$40,000 |

* None of the capital gains are discount capital gains.

Rhonda’s taxable income for the 2010-11 income year is:

a) $100,000.

b) $110,000.

c) $120,000.

d) $140,000.

e) None of the above.
QUESTION TWO

Jennifer is the manager of a theatre company in Sydney and the terms of her contract of employment specify that she is employed for a period of 10-years. On 1 January 2011, after Jennifer had been working for the theatre for six years, the business was sold to Purchaser Pty Ltd (Purchaser). Purchaser wanted to terminate Jennifer’s employment. Purchaser agreed to pay Jennifer “by way of compensation” the same amounts at the same times which Jennifer would have otherwise been entitled to receive as salary, in accordance with her employment contract, had her employment not been terminated. The ATO advises that this arrangement does not represent the loss of a valuable right to Jennifer, given her circumstances. Assume that the ATO is correct.

Jennifer’s salary in 2010-11 for...
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