Calculating tax payable re JV

Hi all,
I have an accounting related question with regard to a case I?m facing that I?d like some clarity on from a tax perspective.
Person A bought some land many moons ago for $200k.
Person A entered into a JV with XYZ Pty Ltd to develop a block of units on Person A?s land of which each party is to take 50% of the output.
I am concerned with how the JV agreement is worded.
Essentially XYZ is to be taxed on the sale of its output (being 50%) less 100% of the construction and financing costs thereby reducing the profits made in the company.
How would the ATO view this?
Could this potentially fall under Part IVA as this appears to defer the (significant) taxing point to if and when Person A sells their output which would be on Capital account and therefore allow the use of the 50% General CGT discount.
I mention that the CGT event is the significant taxing point because the cost base would be the $200k that was paid for the land.

How much weight does a JV agreement carry with the ATO? Can it determine which party gets taxed on what?

Thanks in advance.
 
Its highly probable that the JV is a partnership and needs to register for tax purposes and GST. Each party to the partnership pays their respective tax based upon the agreement. ATO are fine with this. I didn't quite understand how the land factors into it.

CGT ?? No. LOL. A JV is a commercial enterprise with an intention by both parties to financially benefit (profit has a broad meaning). The parties would be taxed as ordinary income. These laws well outdate CGT.

GST on costs incurred needs to be understood also.

You need to get tax advice. GST will also apply to the SUPPLY (doesn't even need to be a sale !) of the finished product. The supply of land by A may (or may not be) a taxable supply and have a GST issue. A partition may have been or be an alternative and save duty in some states but seems unlikely as ownership interests must be identical before and after. Its possible that using a JV could affect use of margin scheme too and cost more in GST.

If the property is then kept by A / XYZ there could be GST financing issues.

There is a (small) possible (??) CGT event for A which may alter outcomes. Maybe.
 
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