In the case of Rutledge v CIR – CS 1929, 14 TC 490, on returning to the UK, from a business trip to Germany, the taxpayer sold the sole consignment of toilet rolls that was purchased in Germany to one individual for a profit. The court ruled that: a. An adventure in trade. The case was decided on the fact that the purchase was not made for own use or investment purposes. It is not the existence of profit that makes it a trade but the motive to earn a profit. b. The profit made on this single purchase was minimal and hence this was not considered a trading activity. c. There was no motive to earn a profit hence this was not a trading activity d. This was a capital transaction which was not subject to income tax.
In the case of Rutledge v CIR – CS 1929, 14 TC 490, on returning to the UK, from a business trip to Germany, the taxpayer sold the sole consignment of toilet rolls that was purchased in Germany to one individual for a profit. The court ruled that: a. An adventure in trade. The case was decided on the fact that the purchase was not made for own use or investment purposes. It is not the existence of profit that makes it a trade but the motive to earn a profit. b. The profit made on this single purchase was minimal and hence this was not considered a trading activity. c. There was no motive to earn a profit hence this was not a trading activity d. This was a capital transaction which was not subject to income tax.
Chapter2: Working With The Tax Law
Section: Chapter Questions
Problem 17DQ
Related questions
Question
In the case of Rutledge v CIR – CS 1929, 14 TC 490, on returning to the UK, from a business trip to Germany, the taxpayer sold the sole consignment of toilet rolls that was purchased in Germany to one individual for a profit. The court ruled that:
a.
An adventure in trade. The case was decided on the fact that the purchase was not made for own use or investment purposes. It is not the existence of profit that makes it a trade but the motive to earn a profit.
b.
The profit made on this single purchase was minimal and hence this was not considered a trading activity.
c.
There was no motive to earn a profit hence this was not a trading activity
d.
This was a capital transaction which was not subject to income tax.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Business Its Legal Ethical & Global Environment
Accounting
ISBN:
9781305224414
Author:
JENNINGS
Publisher:
Cengage