question archive Jenny carries on a business buying and selling land

Jenny carries on a business buying and selling land

Subject:FinancePrice:2.86 Bought3

Jenny carries on a business buying and selling land. During the current year she purchased two blocks of land for $80 000 each. Having purchased the blocks she spent $10 000 on each block to prepare them for sale. During the current tax year ended 30 June, Jenny received $140 000 from the sale of one of the blocks of land. Jenny incurred advertising costs of $5000 in relation to the sale of the block of land.

Which of the following statements is most correct?

Select one:

1. The land can be classified as trading stock in accordance with the case of FCT v St Huberts Island Pty Ltd (1978) 8 ATR 852.

2. $135 000 will be ordinary income under section 6-5 ITAA 97.

3. $45 000 will be ordinary income under section 6-5 ITAA 97.

4. Sally will not be entitled to a deduction for the purchase of the land as the purchase is capital in nature.

5. Sally will need to apply the capital gains tax provisions in order to determine her assessable income for the 2014 year.

Option 1

Low Cost Option
Download this past answer in few clicks

2.86 USD

PURCHASE SOLUTION

Option 2

Custom new solution created by our subject matter experts

GET A QUOTE

rated 5 stars

Purchased 3 times

Completion Status 100%