Tax law Coursework Example | Topics and Well Written Essays - 1000 words

Tax law - Coursework Example This paper will look at four different examples of taxes and explain these examples using scenarios (Amatucci, GonzaÃŒ lez, Trzaskalik and Amatucci 2006). The tax imposed on Brain’s family home and shop is classified as a capital gain tax. This is because the price at which he sold it was higher than the price in which he bought it plus all the commissions and the improvement cost. There is also the net rate of appreciation. He bought the empty premises ten years ago at 750 thousand dollars and started his business. He sold it at 1,880,000 dollars. The tax imposed here will be nominal based which implies that it will not change with inflation rates. Brain’s property will be taxed as a long-term capital gain since he has owned the property and business for over one year. The shop and land will be taxed at 15% to 20%. The trading stock, goodwill, and fittings may be exempted from taxation since they are long term gains acquired and are below the 20 percent mark of the total amount. Since Brain is married, and his wife has a 5% ownership in the company where Brain 45% and is worth 5.4 million dollars, the couple will be excluded a tax of up to 540 thousand dollars. The 20 thousand dollars, he received for signing an agreement of not establishing a business in a 10 kilometer radius of the property he sold, will not also be taxed. However, he has to stick to the agreement for five years to avoid a penalty on him. The tax imposed on income from property is either capital on general principles or income. In George’s case, the sale of trees at a cost of 20 dollars for each tree is classified as farm income since the trees are farm produce and are taxable under the farm income statement. This implies George will be taxed on a rate stipulated in the country that changes with time. In the second year, George will also be taxed on the 9