Case studies of specific deductions and tax liability

Assignment Help Taxation

Reference no: EM132760437 , Length: word count:1900

HI6028 Taxation Theory, Practice & Law - Holmes Institute

Assessment - Case Studies of Specific Deductions and Tax Liability

Purpose

Learning outcome 1. Demonstrate an understanding of the Australian income tax system, the concept of FBT, Ordinary Income, general anti-avoidance provisions and income tax administration.
Learning outcome 2. Identify and critically analyse taxation issues.
Learning outcome 3. Interpret the relevant taxation legislations and case law.
Learning outcome 4. Apply taxation principles to real life problems.

Question 1
MJ Limited purchased a machinery for $50,000 for its operations on 1 October 2015 and have been using it for income producing activities. In the current financial year (2019-2020), the machinery broke down and it was replaced with another machinerywith the cost of $70,000 which could improve(?) the production, a feature that was not available in previous machinery.

Explain in detail using relevant tax laws and cases whether this amount of $70,000 is deductible for MJ limited.

Kindly use the four sections of:
1. Facts of the scenario
2. Relevant laws and cases
3. Application of laws and cases
4. Conclusion

Question 2
Calculate Total Assessable Income, Taxable Income, Tax Liability, Medicare Levy and Medicare Levy Surcharge, if applicable, for the tax payer (James) with information below:
- James is a resident single tax payer of Australia for the tax year 2019-2020
- His Taxable Salary earned is $170,000 (Including tax withheld) having no private health insurance.
- James has a student loan outstanding for his previous studies at Monash University of $57,000.
- James' employer pays superannuation guarantee charge of 9.5% on top of his salary to his nominated fund.
- James earned a passive income of $15,000 from the investments in shares in the same tax year.

Reference no: EM132760437

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