Assignment 1: You should attempt both parts to this assignment Note: you should incorporate all sections of the various Acts/regulations where appropriate. Part 1: Case study Janet (taxpayer) residing in Australia is named as the sole beneficiary

Assignment 1: You should attempt both parts to this assignment 

Note: you should incorporate all sections of the various Acts/regulations 

where appropriate. 

 

Part 1: Case study 

 

Janet (taxpayer) residing in Australia is named as the sole beneficiary of a 

property (1.85 hectares) with a large homestead as a result of the death 

of a relative on 7/10/2010. The property is not used for commercial 

purposes and at the date of death, the property was valued at 

$1.45million. Settlement took place on 21/12/2010. After moving into the 

homestead shortly after taking ownership, she planned to take a one-year 

trip which she had been planning for some time in late 2011. The taxpayer 

felt that the homestead was far too large for her (she is single), applied to 

the ATO for an exemption for ABN registration and some fourteen months 

later (16/2/2012), she obtained council approval to subdivide the property 

into three, with the intention of building three units, one she will take up as 

her own residence, the other two will be sold. Work commenced some 

weeks after approval and on 12th December that same year, the 

taxpayer returned and moved into one of the apartments. The other two 

were sold in March/April in 2013, one selling for $1.35m (24/3/2013), the 

other for $1.45m (9/4/2013). 

 

You are to consider the CGT implications both from the relevant sections 

(ITAA), rulings, etc. and from the values (if/where applicable). Assume that 

the blocks are subdivided equally. For each determination that you make, 

you should clarify. You should also clarify what Capital Gains and CGT is in 

your answer (15 marks) 

 

Part 2: Question 

Explain using examples and relevant sections of the act, what the 

differences between Ordinary Income and Statutory income are. Use your 

own examples (not from MTG or Barkoczy text) (5 marks) 

 

guide lines: www.ato.gov.au   this case study fall in which section? CGT events. sec 110-25, sec 104-110. support from ruling point of view?section 118 &sec 140.give some case study  NGUYENA VS TIMES. explain why normally people go for valuation?