PROBLEM QUESTION Tim works as an engineer at a Melbourne based engineering company. He is a resident of Australia for tax purposes. His annual salary is $120,000. Tim has always had a keen interest in cars and in January 2017 he purchased a 1938 Mercedes-Benz diesel-engined car, one of the first diesel-engined cars to be made. The car only cost him $30,000 to purchase because it was not in working condition. However, Tim believed that with his engineering expertise, he would be able to get the car to work. His intention was to fully restore the car to working condition and give it to his father, Papa Lou, as a present for his 70th birthday. Tim spent all of his free time and approximately $50,000 in fixing the car. The most significant expenditure was the purchase of a new engine from a German company. The engine cost Tim $10,000 plus $2,000 in shipping and insurance expenses. In his efforts to fix the car, Tim met many car enthusiasts who were very excited to hear about Tim's project. A few of them even offered to buy the car once it was fixed, with an additional amount to compensate Tim for all of the time spent on fixing the car but Tim was not interested in selling the car. However, in August 2017 he received an offer of $500,000 from a Russian collector who had heard about the car through the internet. Tim decided that it was an offer he could not refuse and he sold the car to the collector for $500,000 plus $5,000 in shipping and insurance costs