Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Taxation Expert

Problem:

Glenn and Andrea are both highly paid professional people living and working in Melbourne. They decide to opt out of the ‘rat race’ and settle for a much quieter life. With the money from the sale of their house in Melbourne they buy a large house with a swimming pool and tennis court on a ten hectare block in country Queensland. Andrea works part-time as an accountant in a local firm and Glenn works part-time as a doctor. Glenn’s bedside manner is a hit with the elderly ladies in the town and he often receives homemade cakes and biscuits along with his fee. On one occasion he received 12 chickens from a grateful local chicken farmer for using his medical knowledge to save the life of a pet dog when the vet was not available.

Glenn and Andrea enjoy the slower-paced country lifestyle and particularly enjoy gardening. They begin growing their own vegetables and attend an adult education course on organic gardening. In their second season they find they have vegetables far in excess of their needs. Andrea makes jams and relishes with some of the excess and gives them to her neighbours. They prove so popular Andrea is encouraged to make more and soon has her own stall at the markets, held once a month. Andrea also donates her products to be sold at any school fundraising activities. Glenn sold the remainder of the excess vegetables to the local supermarket. He now regularly supplies three retail outlets with pumpkins and sweet potatoes. Glenn and Andrea spend most weekends in their vegetable garden. They don’t keep any records of their income and expenses, as they don’t have the aim of making a profit. However, they estimate their gross receipts from vegetable and jam sales is around $50- $70 per week.

Glenn and Andrea’s neighbours have a citrus orchard and throughout the year they regularly swap vegetables for oranges and lemons. This seems such a good idea that they decide to set up a ‘barter’ system in their area. To join the system a person must pay an up-front one-off payment of $15. Glenn and Andrea keep this as a charge for keeping the administrative records. Thereafter people register their goods or services to be bartered. For ex, Sally is a retired hairdresser and will cut people’s hair at their home. No cash changes hands, but she receives a credit on her account for 15 ‘barts’. She can then choose to use that for goods or services to the same value (fresh vegetables, child minding, lawn mowing etc.) Sally thinks this is a great idea as she can barter for her services without needing cash.

a) Advise Glenn and Andrea which, if any, of the amounts received by them may have income tax implications.

b) Advise the participants in the ‘barter’ system of the income tax implications, if any, of participating in the system.

Rationale:

This assignment is designed to assess your understanding of Ordinary Income. Please refer to relevant case and statute law to support your advice. This assignment should be approached in IRAT format. The referencing style for law subjects is the AGLC style:

http://www.lib.latrobe.edu.au/referencing-tool/aglc/

Taxation, Accounting

  • Category:- Taxation
  • Reference No.:- M91204

Have any Question? 


Related Questions in Taxation

Overviewthe final project for this course is broken into

Overview The final project for this course is broken into two parts. The first part is the creation of a memorandum, which is outlined below. The second part is a PowerPoint presentation, which is outlined in Final Proje ...

Tax assignmenta1what code section discusses partnership

TAX Assignment A.) 1. What Code Section discusses partnership formation under the Internal Revenue Code? 2. How does this Section differ from a corporate formation under Section 351? 3. What does it mean when we say that ...

Assignmentcarrie a morgan age 45 is single and lives with

Assignment Carrie A. Morgan, age 45, is single and lives with her dependent mother at 426 Grouse Avenue, Allentown, PA 18105. Her Social Security number is 111-11-1112. 1. Carrie is a licensed hairstylist and operates he ...

Accounting taxa truefalse1 a distribution from a

Accounting Tax A.) True/False 1 A distribution from a corporation will be taxable to the recipient shareholders only to the extent of the corporation's E & P. 2 All distributions that are not dividends are a return of ca ...

Assignmentchapter 5problem 24at the start of the current

Assignment CHAPTER 5 PROBLEM # 24 At the start of the current year, Blue Corporation (a calendar year taxpayer) has accumulated E & P of $100,000. Blue's current E & P is $60,000, and at the end of the year, it distribut ...

Criterion 11 which of the following is not a primary tax

Criterion 1 1. Which of the following is NOT a primary tax authority? a. Treasury Regulation b. Revenue Ruling c. a Tax Court Memorandum decision d. an IRS publication 2. Congress' authority to enact an income tax was es ...

Taxation research and communicationthe current tax law

Taxation Research and Communication The current tax law system in the United States has emerged over many years from statutory, administrative, and judicial sources. These sources are continually changing and new laws ar ...

Assignment question1 the alternative minimum tax is the

Assignment Question 1. The alternative minimum tax is the excess of the tentative minimum tax amount over the regular tax amount. True False 2. The minimum tax credit available for a corporation's alternative minimum tax ...

Alternative minimum tax please resppond to the

"Alternative Minimum Tax" Please resppond to the following: • Analyze the rules concerning the alternative minimum tax for individual taxpayers. Based on your analysis, recommend at least two changes to the alternative m ...

Prepare a 2015 form 1120 - us corporation income tax return

Prepare a 2015 Form 1120 - U.S. Corporation Income Tax Return - for Freddy Falcon Inc. based on the information provided: Prepare the return as if you were preparing it for an actual client. All necessary forms and sched ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen