Question

Q33 Which of the following statements is least likely to lead to a conclusion that the taxpayer was undertaking the mere realisation of a capital asset?

	a.	The land was surplus to the taxpayer’s needs in carrying on the taxpayer’s manufacturing business.
	b.	The taxpayer set up their own on-site sales office to assist with the sale of the blocks of land.
	c.	The taxpayer developed the land to the extent necessary to get local council approval and no more.
	d.	The land was sold simply by listing it with a local real estate agent.
	e.	The taxpayer continued his or her normal business activities and was not directly involved in the sale of the land.

1 points   

Answer 1

is point e : The taxpayer continued his or her normal business activities and was not directly involved in the sale of the land.

Question is about to find least likely statement which lead to a conclusion that the taxpayer was undertaking the mere realisation of a capital asset. hence we just need to find a statement which does not linked with realisation of a capital asset.

in first point:

land was surplus to the taxpayer’s needs in carrying on the taxpayer’s manufacturing business. so surplus lank can be linked to realisation of a capital asset .

In 2nd point

taxpayer set up their own on-site sales office to assist with the sale of the blocks of land.it also linked with sale of block of land and land is a capital asset.

In 3rd point

taxpayer developed the land to the extent necessary to get local council approval and no more.hence in this also he is developing land and getting approval of requisite authorities si in this case it also can not be said that it is not linked with realisation capital asset.

In 4th point

land was sold simply by listing it with a local real estate agent. this point is directly linked with realisation of land and land is a capital asset.

so all points are linked with realisation of lcapital asset except point e.

in ehich taxpayer continued his or her normal business activities and was not directly involved in the sale or realisation of a capital asset. so the correct answer is Point e.

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