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Essay / Research Paper Abstract
This 12 page paper examines two Australian tax in all cases concerning the way in which a business is defined in order to determine assessable revenue. The cases of Ferguson v FCT (1979) 9 ATR 873 and Stone v FCT (2005) 59 ATR 50 are examined, along with the findings of the courts in the way in which they can be interpreted. The paper ends with a comparison looking at the way in which Stone contrasts with Ferguson. The bibliography cites 8 sources.
Page Count:
12 pages (~225 words per page)
File: TS14_TEautaxsport.rtf
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Unformatted sample text from the term paper:
50 both taxpayers were found to be earning ordinary income from the carrying on of a business. Each of these cases may be seen as clarifying the way in which
legislation and regulation may be interpreted, and building on former cases. By looking at each case the key elements may identified and then compared. The case of Ferguson dealt with
a naval officer who planned on raising cattle after he retired. In preparation for this he entered into an agreement with a management firm to look after five cattle that
he leased, caring for and breeding with them on behalf of the navel officer. During this period the breeding resulted in both heifers and bulls, some of which were retained
and some sold. On retirement Ferguson intended to purchase pasture land and to use the cattle in that business. The key issue for this case was the determination of whether
or not Ferguson could be classified as having a business. Ferguson sought to deduct the leasing and management costs for the cattle under the Income Tax Assessment Act 1936, section
51, but the commissioner disallowed this deduction arguing that Ferguson was not carrying on a business1. The issue that the court had to deal with in this case was
firstly whether the naval officer was undertaking a business, and secondly if this was a business whether the outgoings were of a capital expenditure nature. When looking at the
case there were several areas to consideration that were looked at, these included the assessment of whether the activities undertaken had the aim of creating a profit. Bowen CJ and
Franki J stated that this aspect of the consideration was important, however, it was also noted that when looking at the intentions of the activities and whether or not profit
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