Students are required to follow the instructions by your lecturer to confirm any relevant information. You also need to follow any relevant announcement on Blackboard to confirm the due date and time of the assignment. The individual assignment will assess students on the following learning outcomes:
- Practical skills and knowledge of tax law concepts (e.g. Income and deductions and CGT) (ULO 1).
- Ability to analyse tax law issues (ULO 2).
- Ability to apply legal tax principles (ULO 3)
Question 1: Deductibility / Non-Deductibility Implications Weighting
Identification of material facts regarding Francis’s deductibility of the commercial kitchen expenditures in the given scenario, and the critical discussion of tax consequences relevant to the assignment Question.
Identification and analysis of legal issues / legal Question and relevant taxation law in regards to Francis’s deductibility of the commercial kitchen expenditures (e.g. ITAA1936 and ITAA 1997).
Thorough yet succinct application of tax law (e.g. ITAA 1936 and ITAA 1997) to material facts in Francis’s deductibility of the commercial kitchen scenario.
Correct information and taxation law regarding the deductibility rules have been used and properly cited. A detailed analysis has been performed.
Detailed and accurate conclusions regarding Francis’s deductibility of the commercial kitchen expenditures are reached from the discussions.
Question 2: Calculation Of Taxable Income And Net Tax Payable Weighting
Calculation of Tom’s business income 2 Marks
Calculation of Tom’s taxable income 3 Marks
Calculation of Tom’s tax on taxable income 2 Marks
Calculation of Tom’s net tax payable 3 Marks
Francis is an experienced businessman working in the hospitality industry for many years. He has recently purchased an old restaurant. The commercial kitchen in the restaurant was in poor condition. Replacing the whole commercial kitchen will cost Francis $23,000. The cost of repairing the kitchen appliances will be $4,900, however some parts may not be available in the market anymore as these appliances are too old and obsolete. Francis decided to replace the commercial kitchen with brand new modern appliances because new modern appliances in the market have better features and durability.
Advise Francis on the deductibility of the above transactions. Your advice must be supported by reference to relevant legislation and principles of tax law.
Question 3
Tom owns a business called Tom’s Band in Westfield Sydney selling musical instruments. Tom also teaches guitar on a casual basis at the Sydney Guitar School a local musical college. The following are Tom’s receipts during the 2019-20 financial year:
Tom’s Band sales include $2,500 from sales of musical instruments made last year. In addition, there is a sale of $3,200 made in April of the current year but not yet paid. 220,000 Salary from the Sydney Guitar School. This includes Long Service Leave of$4,200 which Tom is going to take in July of the following year. 53,000 Tom has withdrawal from bank. This was made up of the original capital deposited of $20,000 plus interest of $1,000 which was paid last year and reinvested. Interest of 5% was paid on the invested money. 22,050 Fully franked dividends includes franking credits of $5,143 were attached. 12,000 Unfranked dividend 4,000
Assuming Tom does not have allowable deductions, you are required to calculate Tom's taxable income and net tax payable.
Assignment Structure should be as the following (students’ responses involves calculations, and students must refer to the relevant legislation and cases whenever required according to the Questions).
Identification of material facts regarding Francis’s deductibility of the commercial kitchen expenditures in the given scenario, and the critical discussion of tax consequences relevant to the assignment Question.
Identification and analysis of legal issues / legal Question and relevant taxation law in regards to Francis’s deductibility of the commercial kitchen expenditures (e.g. ITAA 1936 and ITAA 1997). Thorough yet succinct application of tax law (e.g. ITAA 1936 and ITAA 1997) to material facts in Francis’s deductibility of the commercial kitchen scenario.
Correct information and taxation law regarding the deductibility rules have been used and properly cited. A detailed analysis has been performed.
Detailed and accurate conclusions regarding Francis’s deductibility of the commercial kitchen expenditures are reached from the discussions.
