The Problem Of An Australian Resident

1. Noncash items received as income must be included in income at their fair market value.

Under Canadian Tax Law, there is an election for companies to defer recaptures and capital gains of property that was involuntarily or voluntarily disposed of. In this research paper, we attempt to prove that the election is a useful taxation strategy for businesses so that they are not subject to pay taxes on capital gains or recaptures until such a time where they may acquire an eligible replacement property that will help them earn business income. We will provide facts, definitions, and examples to illustrate the use of this election throughout the paper by explaining the capital cost allowance system, the offset available to business for capital gains and recaptures, the election process, the rules regarding replacing former business

“The reasonably probable legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value”.

Management wants the sale to be reported in fiscal 20X7. The deposit ($6,000,000) was received in May 2007 according to their sales agreement, so it should be reported in 20X7 as unearned revenue because WAL still possesses the land until February 20X8. Once the sale is complete in February 20X8, the income should be reported in fiscal 20X8. After the land is sold, the remaining balance becomes Accounts Receivable until realized.

The Tax Court, per Judge Ruwe, issued an order on May 8, 1995, denying Pope & Talbot 's motion and granting the IRS 's motion. The court 's opinion characterized the issue before it as one of "first impression," and found resort to the legislative history of the statute necessary since the court was unable to "achieve...certainty based on the language of the statute." After reviewing the legislative history of IRC Sec. 311, the court observed the following: It is apparent that the purpose underlying IRC Sec. 311(d) was to tax the appreciation in value that occurred while the corporation held the property and to prevent a corporation from avoiding tax on the inherent gain by distributing such property to its shareholders...It follows that we must focus on the value of the Washington properties as owned by petitioner and value them as if petitioner had sold them at fair market value at the time of distribution.

Kelo v. City of New London 545 U.S. 469 (2005) the U.S. Supreme Court answered “yes” to the question of whether or not taking land for the sole purpose of economic improvement would fall into the realm of public use requirement set forth in the Fifth Amendment’s Takings Clause.

2. Due to the circumstances of the contract (that it be for sale of land) specific performance will be awarded.

In 2013 Marianne sold land, building and equipment with a combined basis of $150,000 to an unrelated third party and in return received an installment note of $80,000 per year for five years. Of the $250,000 gain on sale, $150,000 was classified as Section 1245 gain and the remaining $100,000 was Section 1231 gain. In 2013, Marianne had a capital loss carryover of $60,000, $50,000 of which she used to offset her Section 1231 gain; she recognized no Section 1245 gain. The following year she recognized $40,000 of 1245 gain and $10,000 of Section 1231 gain which she promptly offset with the last $10,000 of the capital loss carryover. In 2015, she recognized $50,000 Section 1245 gain and no Section 1231 gain.

• Whether the transfer of chattels and other personal property attached to the land were not fixtures under the general law definition.

Once a gain or loss is recognized, a taxpayer must determine how the recognized gain or loss affects the taxpayer’s tax liability. The character depends on a combination of two factors: purpose or use of the asset and holding period. The purpose or use of the asset is important because the law does not treat all assets equally. The general use categories are: (1) trade or business, (2) for the production of income (rental activities), (3) investment, and (4) personal. Based on these criteria, we can categorize an asset into one of three groups: (1) ordinary, (2) capital, or (3) section 1231. Characterizing the gain or loss is important because all gains and losses are not equal. Ordinary gains and losses are taxed at ordinary income rates, regardless of the holding

In the Lucas case property was purchased on the costal area of South Carolina. When Lucas purchased the property he had the intent to build single-family homes. Under the understand of the regulation that he could not build with in three- hundred feet form the

Furthermore, it was found that the prohibition of use was a deprivation of any reasonable use for the parcels and eliminated the unrestricted right of use resulting in the parcels being rendered valueless. Lastly, the court determined that the parcels had in fact been “taken” by the Act and ordered that Lucas be paid just compensation in the amount of just over $1.2 million. Required compensation encompasses that the property owner to suffer a physical “invasion” of his property as well as denies all economically beneficial or productive use of land. The Supreme Court of South Carolina ruled that when regulations are in place to “prevent serious public harm”, id. at 383, 404 S.E.2d at 899, just compensation is not owed under the Takings Clause despite effect on property value. The court was unable to back the statue that construction of the two lots would threaten he public resource. Id. at 383, 404 S.E.2d at 898. The court reasoned that any regulations that deny a property owner of viable economic use of land constitutes regulatory deprivation requiring compensation. Due to Lucas having to sacrifice all economically beneficial uses for a common good and must leave the property useless then the owner had suffered a taking. It was argued that the owner’s view of deprivation of all economically beneficial use constitutes a deprivation in the

(A) if such contract or interest therein has a basis for determining gain or loss in the hands of a transferee determined in whole or in part by reference to such basis of such contract or interest therein in the hands of the transferor,

Market shall not exceed the net realizable value b. Market shall not be less than net realizable value reduced by an allowance for an approximately normal profit margin. Net Realizable Value Estimated selling price in the ordinary course of business less reasonably predictable costs of completion and disposal.

The Land Registration Act (LRA) 1925 has drawn much flak over the years with regards to one of its most important provisions on overriding interests (OI), which often goes unnoticed until it swoops up and takes priority over the rights of a future purchaser. These interests often come in the form of other occupiers in the property with an equitable interest and, like in the case of Boland , this leaves the lender in a tight spot when they find out about the existence of these interests only after they have initiate proceedings for possession against the defaulting borrowers. Due to the other occupier’s concealed nature on the property register, the lenders have regained their footing by applying the concept of overreaching and ….. The Law Commission, on the other hand, contemplated abolishing these interest altogether but did not go to that extent because it was neither feasible nor desirable Instead, they shrank their impact on land by reforming the operation and scope of the OI. With LRA 2002 sch 3 para 2, lenders now have more control over what may bite them. …. This essay will access…. with a focus on how the lending world have dealt with the implications of Boland…. The best way to access the impact of … would be to go through the pre – post blabla to show how the thing has balanced.