In 2015 Winnie, an Australian resident individual, sold her horse breeding business based in the south eastern suburbs of Melbourne.
The purchaser of the business did not want to buy the land. The real estate comprises 10 hectares which cost her $1m in 2005.
Winnie put the entire real estate up for auction but it failed to reach her reserve price of $10m and was passed in. Her real estate agent had suggested the reserve was a fair market value but at
the moment no buyers were interested in such a large parcel of land.
She sought advice from agents and accountants who suggested that smaller blocks of land would be more affordable for home buyers. Potentially, 10 vacant one hectare blocks would sell for $2m each
and would require minimal costs to subdivide.
However, Winnie was also advised that 50 townhouses could be built at a cost of $100,000 each and they could sell for $1m e

In July 2016, Winnie installed office cabins on the site and personally managed the entire construction, sales and marketing activities. 50 townhouses on equal size and value blocks were
constructed and by 30 June 2017 half of these had been sold for a total of $25m.
Required:
Advise Winnie of the possible income tax consequences of the $25m real estate sales this year.
You should discuss any alternative views based on the facts, using quality legal references.
Determine the assessable income resulting from each alternative view.
Finally, provide your opinion on which you think is the better or correct outcome.