Question

In: Accounting

Ralph is the owner of a business that sells clothing.

Ralph is the owner of a business that sells clothing. You have determined that he has an annual turnover of $3 million and his net asset value is $7 million. Which of the following is correct?



Ralph cannot claim the general small business entity concessions while he is a going concern, but he can claim the capital gains tax small business concessions when he sells the business.



Ralph can claim the general small business entity concessions while he is a going concern as well as the capital gains tax small business concessions when he sells the business.



Ralph can claim the general small business entity concessions while he is a going concern as but not the capital gains tax small business concessions when he sells the business.



Ralph can claim neither the general small business entity concessions while he is a going concern nor the capital gains tax small business concessions when he sells the business.

Solutions

Expert Solution

According to the rules, option B is correct which is:

Ralph can claim the general small business entity concessions while he is a going concern as well as the capital gains tax small business concessions when he sells the business.

Because the general small business entity concessions, the companies are eligible whose operation of business for all or part of the income year have less that $10Million aggregated turnover and this business meets that criteria.

And the CGT small business concessions eligibility criteria is the threshhold for the turnover is $2Million and this business is coming under that.

ekkarill92 answered 2 years ago
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