Abstract

http://ssrn.com/abstract=1506585
 


 



Land Sales: Assessment of Profit When Price Received Includes a Non-Cash Element


John Prebble


Victoria University of Wellington - Faculty of Law; Monash University; Institut für Österreichisches und Internationales Steuerrecht, Wirtschaftsuniversität Wien

May 17, 1979


Abstract:     
The paper deals with the taxation of transactions involving the sale of land where the price received includes a non-cash element, most commonly, a mortgage to the vendor. Generally, such transactions are taxable in New Zealand only when the vendor is in the business of selling properties. The issue is at what point the mortgage is “received” for tax purposes. The paper argues that the true value of the non-cash element should be established at the point when the property is sold. In cases where the vendor has discounted the mortgage, he or she should be able to claim the discount as a deduction from overall taxable income. In cases where the mortgage was sold for more than face value, the vendor should be taxed on its actual value.

Number of Pages in PDF File: 23

Keywords: Tax Law, Property, Sale of Land, Mortgage, Income Tax

JEL Classification: K11, K34

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Date posted: November 16, 2009  

Suggested Citation

Prebble, John, Land Sales: Assessment of Profit When Price Received Includes a Non-Cash Element (May 17, 1979). Available at SSRN: http://ssrn.com/abstract=1506585 or http://dx.doi.org/10.2139/ssrn.1506585

Contact Information

John Prebble (Contact Author)
Victoria University of Wellington - Faculty of Law ( email )
PO Box 600
Wellington, 6140
New Zealand
+64 4 463 6311 (Phone)
Papers Indexed at HOME PAGE (Fax)
HOME PAGE: http://www.victoria.ac.nz/law/staff/prebble-scholarly.aspx

Monash University
Victoria 3084
Australia

Monash University Business and Economics Logo

Institut für Österreichisches und Internationales Steuerrecht, Wirtschaftsuniversität Wien ( email )
Welthandelsplatz 1
Vienna, Wien 1020
Austria

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