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HI6028 Taxation Theory, Practice & Law - Holmes Institute

Assessment - Case Studies of Specific Deductions and Tax Liability

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 (Jenny) with information below:
• Jenny is a resident single mom with one dependent child (7 years old) tax payer of Australia for the tax year 2019-2020
• Her Taxable Salary earned is $120,000 (Including tax withheld) having no private health insurance.
• Jenny has a student loan outstanding for his previous studies at Queensland University of $32,000.
• Jenny's employer pays superannuation guarantee charge of 9.5% on top of her salary to her nominated fund.
• Jenny earned a passive income of $5,000 from the investments in shares in the same tax year.

Attachment:- Deductions and Tax Liability.rar