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Introduction to Taxation Law 7037 – S2 2017 Problem Solving Assignment

07 Sep

A hard copy of the Problem Solving Assignment must be submitted to Building 11, Level A, Box 119 by 5.30 pm, on Monday 4 September 2017.

 

All written work submitted in this subject should display an Assignment cover sheet, which is available on the Moodle site for this subject.

 

You must retain a copy of any written work submitted for assessment.

 

An electronic copy of the assignmentmust also be submittedvia the Moodle site Assignment Drop Box no later than the same time. See Moodle for specific details of the electronic copy submission. The Assignment cover sheet is not required for the Moodle Drop Box submission; however please ensure your student number is on the top right corner of your Moodle submission.

 

Late penalties (as per the policy on late submission of assessment) will apply. Please check the unit outline for details of the policy on lateness, extension requests and the marking criteria forthis Legal problemassessment item.

 

All assignment answers must be the sole work of the student submitting them (see the University’s policies on plagiarism).

The assignment must be typed, in either pdf or word format, and the typeface must “Times New Roman, 12”, with a 5 cm margin on the left hand side. The assignment must be single sided and must also contain a Reference List. For citation of legislation, cases, and secondary sources, you are required to use Footnotes.

Your answers should be no longer than 1800 words.

The total marks for this assignment is 30 marks.

 

 

 

 

Question

 

Mary was a member of the Australian Olympic Games squad at the 2016 Rio Olympics. At all relevant times Mary has been a resident of Australia for taxation purposes. She specialised in the Women’s individual sprint. Although she trained for six hours each day, Mary had retained her amateur status.

 

Mary won the gold medal at the 2016 Rio Olympics on 16 August 2016. On 21 September 2016, a prominent breakfast food company paid Mary a $50,000 lump sum as an inducement for entering into an endorsement contract with it. The company also agreed to pay Mary $500,000 each year for three years. Mary was also entitled to 2 boxes of breakfast cereal per week for the duration of the contract. The contract specified that the boxes of breakfast cereal were for her personal use only. Each box of the cereal has a recommended retail price of $7.50.

 

Under the contract, Mary was required to attend a prescribed number of promotional events, participate in 10 television commercials as directed, and attend the annual staff dinner held by the company. Finally, the company agreed to pay Mary $50,000 for providing ‘the exclusive story of her life’ in written form to the company’s publicists. The company could use Mary’s life story in promoting her association with the company.

 

On 22 September 2017 (i.e. approximately one year after Mary entered into the endorsement contract) Mary announced that she was turning professional. On 25 September 2017 Mary entered into an endorsement contract with Whacker Sports, a new digital broadcaster specialising in sports television. Under this agreement Whacker was required to pay $50,000 to Mary’s spouse (who had no other income).

 

Mary has sought your advice as to whether the value of the Gold medal, and any of the cash payments under the endorsement contracts, must be included in her assessable income under s 6-5 of the Income Tax Assessment Act 1997. Advise her.

 

 
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Posted by on September 7, 2017 in academic writing

 

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