Case Study: Ordinary Income Statement
a) As per Section 290.150 of ITAA 1997 the contributions made in the superannuation benefit is deductible regardless of the fact that benefit is payable to the employee or his dependants.
Therefore, the superannuation contribution amounting to $10000 will not be included in the assessable income of Nick.
b) As per the principles of Ordinary Income compensation for loss of income is also an income therefore, it will form part of assessable income.
Nick must include $50000 as his assessable income for the year.
c) The amount has been received by Nick towards operation and rehabilitation expenses and therefore, they are not included under income from ordinary concepts.
The receipt of $8000 will not be included in the assessable income of Nick. …show more content…
In the case of Federal Commissioner of Taxation v Slaven (1984) 1 FCR 11 it was held that if the compensation is for lost capacity it would be a part of capital receipt and hence, will not be included in the assessable income of the …show more content…
The business includes the term profession as well so, the receipt would be considered as an ordinary income.
In the given case, the direct receipts from the patients amounting to $79000 and the receipt from Medicare amounting to $154,000 would be included in the assessable income of Quentin.
g) Compensation for loss income would be treated as income from ordinary sources and would be taxable. The proceeds from disposal of the truck was equal to its book value therefore, it will have no impact and will not form part of assessable income. Keeping in mind the business of the individual reimbursement of deductible tax repairs would not form part of assessable income provided the taxpayer does not claim a deduction on the expense that has been incurred.
Therefore, receipt of $16000 as compensation for loss income would be included in the assessable income of Warren.
h) In the given case, the following situation would arise:-
• Loss of cash sales from robberies $ 21,000 - It is a capital receipt and would not be subject to income tax.
• Loss of Trading Stock 7,800 - It has been received in consideration of the stock that has been lost therefore, it would be considered as an
Therefore, the superannuation contribution amounting to $10000 will not be included in the assessable income of Nick.
b) As per the principles of Ordinary Income compensation for loss of income is also an income therefore, it will form part of assessable income.
Nick must include $50000 as his assessable income for the year.
c) The amount has been received by Nick towards operation and rehabilitation expenses and therefore, they are not included under income from ordinary concepts.
The receipt of $8000 will not be included in the assessable income of Nick. …show more content…
In the case of Federal Commissioner of Taxation v Slaven (1984) 1 FCR 11 it was held that if the compensation is for lost capacity it would be a part of capital receipt and hence, will not be included in the assessable income of the …show more content…
The business includes the term profession as well so, the receipt would be considered as an ordinary income.
In the given case, the direct receipts from the patients amounting to $79000 and the receipt from Medicare amounting to $154,000 would be included in the assessable income of Quentin.
g) Compensation for loss income would be treated as income from ordinary sources and would be taxable. The proceeds from disposal of the truck was equal to its book value therefore, it will have no impact and will not form part of assessable income. Keeping in mind the business of the individual reimbursement of deductible tax repairs would not form part of assessable income provided the taxpayer does not claim a deduction on the expense that has been incurred.
Therefore, receipt of $16000 as compensation for loss income would be included in the assessable income of Warren.
h) In the given case, the following situation would arise:-
• Loss of cash sales from robberies $ 21,000 - It is a capital receipt and would not be subject to income tax.
• Loss of Trading Stock 7,800 - It has been received in consideration of the stock that has been lost therefore, it would be considered as an