Analyzing the Impact of Tax Policies on Housing Affordability | Analytical Essay

The Impact of Tax Policies on Housing Affordability

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QUESTION 1A

Question a

The issue in this question is to discuss whether Clara receiving $25,000 constitutes assessable income. Under section 6-5(1) ITAA 97, assessable income is defined as an income that can either statutory income or ordinary income or even both. Assessable income includes all the wages, commissions, salaries along with awards, bonuses, contributions to compensation plans, cost of living allowances, and employee fringe benefits.^[1]

From the case involving Clara, she was appointed as an income tax manager to deal majorly with income tax matters. However, her role was changed to another one that predominantly dealt with GST even though her job title remained unchanged. From the case study, it can be concluded that the compensation was made to Clara for her to relinquish…