Reference no: EM133516871

Taxation Theory, Practice and Law

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.

Problem 1:
Robert recently purchased a Theatre Hall. The condition of the hall was poor. Before using commercially, the hall, it needed to repair a portion of the ceiling and seats. He decided to replace the whole of the ceiling with different but better materials and replaced all seats with better quality leather seats. The new ceiling and seats, in addition to enhancing the appearance of the hall, improved the acoustics. The total cost of the material and of erecting the new ceiling and seats was $355,000. It was estimated that the cost of repairing the ceiling and seats would have been $250,000.

With reference to Income Tax Assessment Act 1997 and relevant case law, discuss the amount, if any, allowable as a deduction for income tax purposes. (Maximum 800 words)

Kindly use the following instructions:

• Facts of the scenario

• Issues

• Relevant laws and cases

• Application of laws and cases

• Conclusion

Problem 2
You are working with an accounting firm. Sussie, who is representing Suss Co, needs advice about depreciating assets. She asks; what are depreciating assets? What are the different ways to calculate the declining value of depreciating assets? Furthermore, Suss Co has aggregated turnover of $ 2 billion. In December 2022, Suss Co purchased a machine for $4m, which was commenced immediately for an income-producing purpose. What tax does the Suss Co claim? (Maximum 300 words)

Problem 3

After completion of your course, you start working at an accounting and tax office. Juliana is your first client. She requires to lodge her income tax for 2022-23. She gives her annual income and deduction, which is as below. Calculate her Total Assessable Income, Taxable Income, Tax Liability, Medicare Levy and Medicare Levy Surcharge, if applicable, for the taxpayer (Juliana) with the information below:

• Juliana is a resident single mom with one dependent son (5 years old) taxpayer of Australia for the tax year 2022-2023.
• Her Taxable Salary earned is $105,000 (Including tax withheld), having no private health insurance.
• She had a $7,000 deduction.
• Juliana has a student loan outstanding for her previous study at Sydney University $41,000.
• Juliana's employer pays superannuation guarantee charge of 10.50% on top of her salary to her nominated fund.
• Juliana earned a passive income of $11,000 from the investments in shares in the same tax year.

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