Question 1 (10 marks)
Your client Helen wants to fund her business as a fashion designer, therefore she has sold some of the assets
1- An antique impressionism painting Helen’s father bought in February 1985 for $4,000. Helen sold the
painting on 1 December 2018 for $12,000. (2.5 marks)
2- Helen sold her historical sculpture on 1 January 2018 for $6,000. She has purchased the piece on
December 1993 for $5,500. (2.5 marks)
3- An antique jewellery piece purchased in October 1987 for $14,000. Helen sold the antique jewellery
piece on 20 March 2018 for $13,000. (2.5 marks)
4- Helen sold a picture for $5,000 on 1 July 2018. Her mother purchased the picture in March 1987 for
$470. (2.5 marks)
Advise the Capital Gain Tax consequences of the above transactions.
Question 2 (5 marks)
Barbara is an economist researcher and commentator. The Eco Books Ltd offers her $13,000 for writing a book
about economics principles. Barbara has never written a book about economics principles, but accepts the
offer and writes the economics book called ‘Principles of Economics’. She assigns the book’s copyright for
$13,400 to The Eco Books Ltd. The book is published and she is paid. She also sells the book’s manuscript to
the Eco Books Ltd’s library for $4,350 plus several interview manuscripts she has collected while writing the
economics book for which she receives $3,200.
Discuss each of the above payments to Barbara separately and states if these are income from Barbara’s
personal exertion. (2.5 marks) Would your answer differ if Barbara wrote the Principles of Economics’ book
before signing a contract with The Eco Books Ltd in her spare time and only decided to sell it later? (2.5
marks) Support your answer by referring to relevant statutory and case law.
Question 3 (5 marks)
Patrick paid $52,000 to his son David to provide some assistance in his newly started business. They agreed
that David repay his father $58,000 at the end of five years. Patrick provided this loan to David without any
formal agreement or security deposit for the sum lent. Patrick told his son that he need not pay interest.
However, David repaid the full amount after two years through a cheque, which was included an additional
amount equal to 5% on the amount borrowed.
he literature on the relationship between housing and poverty is much smaller than that on housing and economic growth. Hull (2009) notes there are significant data limitations especially on headcount poverty and labor market outcomes. These data limitations make testing difficult. There is a particular need for data in sub-Saharan Africa. Some findings can be noted and they suggest that all housing investment is not created equal when it comes to addressing poverty. Some of these studies are highlighted here. Gutierrez et al. (2007) find strong evidence that the sectoral pattern of growth and its employment and productivity-intensities matter for poverty reduction. While employment-intensive growth in the secondary sector (manufacturing, construction, mining and utilities) is correlated with poverty reduction, employment-intensive growth in agriculture is correlated with increases in the poverty headcount. By extension, if housing creates growth in manufacturing, construction, mining and utilities, it may be effective in reducing poverty. Similarly, Hull (2009) finds the construction sector is relatively productive but not in all countries. That is, construction reduces measures of poverty in some but not all countries. Erbas and Nothaft (2002) find that low income housing has a lower import component in production and also higher labor intensity. This implies that construction of low income housing will lead to greater employment and growth than the construction of middle or high income housing. Construction of low income housing can effectively improve the living standards of the poorer segments of the population in two ways – by creation of jobs and by creation of suitable housing. Tipple (1994) reviews the literature on the links between employment and housing development and shows that investment in shelter is very effective for promoting employment, especially among lower-income groups; some of the benefits to the economy tend to be inversely proportional to housing cost meaning that low cost housing is more beneficial to the economy. The informal sector and small-scale enterprises tend to outperform the formal sector and larger enterprises. Housing Policy and Poverty in Developing Countries As housing finance policy is considered, the housing programs and policies of local governments must be accounted for in order to assess the potential effectiveness of housing finance in different countries. For example, Malpezzi and Sa-Aadu (1996) review contemporary African housing markets and policies. They find that resource allocation in these count>GET ANSWER