Reference no: EM133693443
Tax Law
Learning outcome 1: Describe the taxation framework in Australia and identify the concepts and principles that underpin Australian Tax Law.
Learning outcome 2. Explain how the main tax laws and regulations in Australia have been applied and identify the body of case law that informs current interpretations of the taxation regime.
Learning outcome 3. Recognise, describe and analyse taxation issues and concepts with regard to problems encountered in commercial settings.
Learning outcome 4. Demonstrate an understanding of substantive areas of taxation law including income tax, goods and services
tax and fringe benefits taxes.
Learning outcome 5. Discuss the role and responsibilities of accountants with regard to taxation law and the preparation of taxation documents.
Assessment Description
This assignment requires students to work in a group of no more than 3 students and explore practical issues in taxation law. It is important for you to have time to think through how to structure and present your responses.
There are two parts.
Part A requires students to provide responses on taxation issues.
Part B requires each member of students to present one question from Part A in a video which must be submitted individually by the due time.
Part A Group Report
Case 1
Jason works as a scientist in Sophisticated Research Foundation. He uses his own car to travel to various locations to conduct experiments. He acquired the car on 1 October 2021 for $70,000. The acquisition cost was funded entirely by a loan at an interest rate of 10%. He has determined that the depreciation deduction on the car would be $2,500 for the year. In addition, Jason incurred the following expenses during the year:
Registration and insurance = $1,300;
Repairs and maintenance = $1,500; and
Oil and fuel costs = $2,500.
For the period 1 October 2021 to 30 June 2022, Jason estimates that the car travelled a total of 20,000 kilometres, 14,000 of which were for business purposes. You may assume that Jason has maintained all necessary records and a logbook.
Required:
Calculate Jason's deduction for car expenses under the logbook method by referencing to Div 28 of ITAA 1997, assuming that depreciation has been adjusted for part year use and the impact of the car limit.
Case 2
Simplicity Ltd manufactures and sells office chairs and desks to local consumers. The company's books of account provide the following information for the income year of 2022/23:
|
1-Jul-22 |
30-Jun-23 |
| Completed chairs and desks ready for sale |
$25,000 |
$17,000 |
| Partly completed chairs and desks |
$20,000 |
$15,000 |
| Timber to manufacture chairs and desks |
$14,000 |
$18,000 |
| Joinery used in manufacturing process (not separately identifiable |
|
|
| once the chairs and desks are manufactured) |
$11,500 |
$12,000 |
| Total purchases of timber during the year = $13,000 |
|
|
| Total purchases of joinery during the year = $11,000 |
|
|
| Total sales of chairs and desks during the year = $250,000 |
|
|
Required:
Advise Simplicity Ltd of its income tax consequences arising from the above information by referencing to the relevant tax law.
Case 3
During the 2022/23 income year, Frank Diego, sold various assets that realized capital gains and losses as follows:
| Items |
Amount ($) |
| Loss on sale of motor vehicle |
5,600 |
| Gain on sale of yacht (cost base not indexed) |
21,900 |
| Gain on sale of antique crockery (indexed cost base) |
13,900 |
| Loss on sale of jewelry |
1,300 |
| Gain on sale of land held as an investment (cost base not indexed) |
24,000 |
| Gain on sale of family home (cost base not indexed) |
38,000 |
| Loss on sale of shares |
19,300 |
| Gain on sale of rental property (indexed cost base) |
21,000 |
| Gain on sale of rare comic book collection (cost base not indexed) |
7,500 |
In each case above, the asset has been held by Frank for more than 12 months and the relevant minimum cost thresholds have been exceeded.
Required:
Calculate the minimum net capital gain that Frank is required to include as assessable income for the 2022/23 income year by referencing to the relevant tax law.
Part B Individual Video Presentation
This part requires each member of a group to present one question from Part A in a video which must be submitted individually by the due time.
The duration of the video should be about 5 minutes.