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Calculate the cost of the CNC machine

Assignment Help Taxation
Reference no: EM132359234 , Length: 2000 Words

Taxation Law Assignment -

Purpose of the assignment - Assignment will assess the following learning outcomes:

1. Practical skills and knowledge of tax law concepts.

2. Ability to analyze tax law issues.

3. Ability to apply legal tax principles.

Assignments' Instructions and Requirements -

QUESTION 1 - Jasmine is an Australian resident. She is 65 years old and born in the UK, is now selling her Australian assets as she is retiring from her business as a cleaner and going back to the UK. Jasmine is selling the following assets:

A. Jasmine's home was purchased in 1981 for $40,000 and now worth $650,000. This home was Jasmine's main residence since she purchased the house.

B. Jasmine purchased a car in 2011 for $31,000 and is now worth around $10,000.

C. Jasmine commenced her 'small cleaning business' herself and now found a buyer to take over the cleaning business for $125,000. The sale price includes $65,000 for all of the business equipment, which cost $75,000, and $60,000 for goodwill.

D. Jasmine is also selling her furniture for $5,000. No single item offered for sale cost more than $2,000.

E. Jasmine has several paintings and is now selling them all for $35,000. All of her paintings were purchased in second hand shops or markets and no single painting cost more than $500. The one exception was a painting she purchased direct from an artist for $1,000. This painting is being sold for $5,000.

Advise Jasmine of the CGT consequences of the above sales. Include relevant legislative references to support your answer.

QUESTION 2 - John owns a motor vehicle parts and accessories manufacturing company. The business produces certified BMW parts. John purchased an industrial computer numerical control (CNC) machine imported from Germany on 1 November 2014 for $300,000. John visited the CNC factory to inspect the CNC machines and place his order. The only reason for his visit to Germany was to purchase the CNC machine. The trip to Germany cost John $12,000. The CNC machine needed to be installed by specialists and bolted to his factory floor. The installation of the CNC machine was completed on 15 January at a cost of $25,000. Once the CNC machine was installed and John started using the CNC machine he discovered that the CNC machine required an additional guiding rod to make it more effective. This guiding rod was installed on 1 February at a cost of $5,000. Calculate the cost of the CNC machine for the purpose of calculating the capital allowance. What is the start time for calculating the decline in value of the asset? Include relevant legislative references to support your answer.

Assignment Structure should be as the following -

For question 1, address the following elements:

A. The capital gain in relation to the family home

B. Capital gain or loss made from the car

C. The capital gain in relation to the sale of the business

D. The capital gain in relation to selling the furniture

E. The capital gain in relation to selling the paintings

For question 2, address the following parts:

Issue: Identify and discuss the problem.

Law and Application: Discussion of the first element of the cost of the CNC machine. Set out the legal principles that will be used to address the problem. Source legal principles from cases and legislation.

Law and Application: Discussion of the second element of the asset's cost, i.e. the start time for calculating the decline in the value of the CNC machine. Set out the legal principles that will be used to address the problem. Source legal principles from cases and legislation.

Law and Application: Concluding discussions regarding the exact start time of holding the CNC machine for depreciation purposes, and the total cost of the machine. Set out the legal principles that will be used to address the problem. Source legal principles from cases and legislation.

Conclusion: Stand back and play 'the judge.' Choose the argument and conclusions you think is the strongest and articulate what you believe to be the appropriate answer.

Reference no: EM132359234

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Reviews

len2359234

8/22/2019 12:15:47 AM

Word limit – A max 2000 words (acceptable to be 10% above or below this word limit). Submission Guidelines - Answer all questions. This assignment along with a completed Assignment Cover Page is to be submitted on Blackboard by the due date in soft-copy only. The assignment is to be submitted in accordance with assessment policy stated in the Subject Outline and Student Handbook. For further details, please refer to the Subject Outline and Student Handbook.

len2359234

8/22/2019 12:15:37 AM

The assignment must be in MS Word format, no spacing, 12-pt Arial font and 2 cm margins on all four sides of your page with appropriate section headings and page numbers. Reference sources must be cited in the text off the report, and listed appropriately at the end in a reference list using Harvard referencing style. You also must refer to relevant legislation and/or case law in your answer. Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using Harvard referencing style. Note: Assessment task is set around the work that you have done in class. You are not expected to go outside the content of the unit but you are expected to explore it.

len2359234

8/22/2019 12:15:29 AM

Marking criteria - For Question 1, students need to answer the following elements correctly: A. The capital gain in relation to the family home 2 Marks, B. Capital gain or loss made from the car 1 Mark, C. The capital gain in relation to the sale of the business 3 Marks, D. The capital gain in relation to selling the furniture 2 Marks and E. The capital gain in relation to selling the paintings 2 Marks.

len2359234

8/22/2019 12:15:23 AM

For Question 2, students need to answer the following elements correctly: Issue: Identify and discuss the problem. 1 Mark, Law and Application: Discussion of the first element of the cost of the CNC machine. Set out the legal principles that will be used to address the problem. Source legal principles from cases and legislation. 3 Marks, Law and Application: Discussion of the second element of the asset's cost, i.e. the start time for calculating the decline in the value of the CNC machine. Set out the legal principles that will be used to address the problem. Source legal principles from cases and legislation. 3 Marks.

len2359234

8/22/2019 12:15:15 AM

Law and Application: Concluding discussions regarding the exact start time of holding the CNC machine for depreciation purposes, and the total cost of the machine. Set out the legal principles that will be used to address the problem. Source legal principles from cases and legislation. 2 Marks and Conclusion: Stand back and play ‘the judge.' Choose the argument and conclusions you think is the strongest and articulate what you believe to be the appropriate answer. 1 Mark.

len2359234

8/22/2019 12:15:09 AM

Marking Rubric - For Question 1, students need to answer the following elements correctly: Student knows how to use the ITAA 1997, know how to apply the law in a real scenario and understand the different CGT consequenc es in relation to the family home. All relevant CGT legal principles in relation to the gain or loss made from the car are clearly explained and their correct source of authority is given. The discussion is a clear and comprehensi ve analysis of the relevant CGT legal principles in relation to the sale of the business is given. All relevant CGT legal principles in relation to selling the furniture are clearly explained and their correct source of authority is given. Student knows how to use the ITAA 1997 in relation to selling the paintings, and know how to apply the law in a real scenario and understand the different CGT consequenc es in relation to selling the paintings.

len2359234

8/22/2019 12:14:55 AM

For Question 2, students need to answer the following parts correctly - The area of law and the legal problem/s regarding the CNC machine that needs to be addressed are identified and completely described. All relevant legal principles regarding the element of the cost of the CNC machine are clearly explained and their correct source of authority is given. The discussion is a clear and comprehensi ve analysis of the relevant legal principles regarding the element of the cost of the CNC machine and their application to the facts to support logical arguments about how the issue/s will be resolved. The discussion regarding the exact start time of holding the CNC machine, and the total cost of the machine are very well supported by arguments in this section and clearly explains how those arguments address the question. The conclusion is very well supported by arguments in the application section and clearly explains how those arguments address the given capital allowance question.

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