On 1 July 201 3, Marble Ltd purchased a machine at a cost of $220,000 (GST inclusive) for use in its business. Marble determined the machine to have an effective life of five years and claimed diminishing value depreciation on that basis. Marble used the machine only for business purposes and sold it for $99,000 (GST inclusive) on 30 June 201 7.

1. Advise Marble on the taxation implications of these transactions.

2. How would your advice differ if Marble had sold the machine for only $55,000 (GST inclusive) to a company that has the same shareholders as Marble?