2. George owns a rental commercial property in Clayton. He offers the property for rent and...

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2. George owns a rental commercial property in Clayton. He offers the property for rent and finds that there is a long queue of interested tenants as the location is ideal for a small business. George decides to rent the property to Kumar who plans to set up a pizza shop, and makes an attractive offer to George. Kumar incentivizes George by giving him a lump sum amount of $90,000 which includes a one-year advance rent payment of $72,000 (agreement is based on $6,000 rent per month). Required: Citing relevant legislation and case law, advise George whether all, part, or none of the receipts constitutes ordinary income. (4 marks) 2. George owns a rental commercial property in Clayton. He offers the property for rent and finds that there is a long queue of interested tenants as the location is ideal for a small business. George decides to rent the property to Kumar who plans to set up a pizza shop, and makes an attractive offer to George. Kumar incentivizes George by giving him a lump sum amount of $90,000 which includes a one-year advance rent payment of $72,000 (agreement is based on $6,000 rent per month). Required: Citing relevant legislation and case law, advise George whether all, part, or none of the receipts constitutes ordinary income. (4 marks)

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In the given scenario George receives a lump sum amount of 90000 from Kumar which includes a oneyear ... View the full answer