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Business or hobby? Using examples below, give reasons indicating whether each taxpayer is conducting

1. Business or hobby? Using the examples below, give reasons indicating whether each taxpayer is conducting a business or a hobby for tax purposes. (a) Mary is working as an artist on a part-time freelance basis. During the financial year, she received $6,000 as a commission for one of her artworks. (b) Pia makes pottery as a hobby and has sold some of her work to the value of $800. Her expenses in relation to her property are in excess of $1,000. (c) Dave carries out gardening tasks in his local area over the weekend. He has received $5,500 during the financial year for his services. (d) Angelita designs wedding dresses and won a local fashion award which resulted in a payment of $5,000. 2. Assessable income from business. Francis Fellowes is a sports coach, offering his services to schools and local sports clubs. He operates his business on an accrual basis for tax purposes. During the 2011/12 financial year he had the following receipts: $ Cash takings from coaching sessions Receipts from regular customer bookings Capital contributed GST received Fully franked dividend 20,000 150,000 10,000 28,000 2,500 (Franked dividend amount × 30/70 = franking credit) Francis also had the following account balances (excluding GST) - Income received in advance as at 30 June 2011 $15,000 - Income received in advance as at 30 June 2012 $12,000

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