Joshua, a young man, who recently graduated with a degree in education is posted to his first teaching appointment near a country town (‘Town’). Joshua’s passion is soccer. He is in fact a very good soccer player. When not busy teaching or preparing lesson plans he can be found playing soccer for several local clubs.

One Saturday the coach of the Town soccer team happens to see Joshua playing soccer. He invites Joshua to join a squad of players training for a national soccer tournament to be held in two weeks' time. Joshua is told that if selected to play in the tournament he will receive $500 per game. Joshua couldn’t care less about the money. For the money, he has school teaching. He just loves playing soccer. He accepts the invitation.

Joshua is in fact selected to play in one of six games that the Town Team plays in the tournament. He receives $500. Meanwhile, Town Team wins the tournament. At victory celebrations, overjoyed supporters place money in a hat passed around ‘for the champions of all Oceania’. The money thus collected is divided into equal shares among all players in the Town Team. Joshua receives (like every other player) $650.

How does the story end? Joshua gets married, has children, and keeps teaching but no longer has time to play soccer.

The tax question: 

On general principles, should the two sums received by Joshua be included in his chargeable income for the year?

Answer rating: 100% (QA)

Step 12 Tax accounting There are various rules and regulations that are applicable on the taxp... View the full answer