general deductions question, Taxation

Simon works as a chiropractor for a small partnership of three other professionals who employ him to work in the office four days each week. Simon earns over $90,000 per year. Each practitioner in the main practice is required to lease a paging unit themselves, so the practice secretary can contact each of them in an emergency situation. The partners of the practice, have co-signed a business loan to meet the costs of starting this practice, including Simon, as they are considering making him a partner. The loan is for $60,000 only and it has been taken out over 5 years at the reasonable interest rate of 8% per annum.

On the fifth day of each week and two evenings each week Simon travels 30 kilometres a private hospital where he takes appointments from staff and patients in a small staff lounge he pays by the hour to use. Simon spent approximately $4,000 on travelling between the practice and the hospital in the last year. The hourly rate is $120. Simon must transport his folding treatment bed and other equipment he uses, between the hospital and the main practice.


There is a uniform Simon is expected to wear whilst at the practice. Simon has this uniform dry-cleaned regularly and last year needed to replace items of uniform. Simon spent $3,500 on his uniform last year.

In June Simon had attempted to clean up the mess one of the partners, the osteopath, had left in the office they shared. Simon fell from the a ladder as he was moving boxes from the top shelf of the bookshelf and suffered injuries which prevents him from working for longer than 6 hours in any day. As he cannot work a full day the partners have terminated Simon''s employment with them.
Simon commences legal proceedings against the partnership for terminating his employment and for injuries he has suffered due to the alleged negligence of her employer as well as seeking to be released from the business loan.

Simon is offered $200,000 for his injuries and also four annual payments of $15,000 each in respect of the termination of his employment.

Advise Simon of the taxation consequences of these transactions for the year, including if Simon were to accept the offer. Would your answer be any different if Simon''s employer offered to pay a lump sum of $195,000 in return for Simon entering an agreement releasing any rights she may have against her employer?

Advise Simon and the practice of the taxation consequences of these transactions for the year with reference to the legislation, rulings and australian case law.
Posted Date: 9/8/2012 2:03:12 PM | Location : United States







Related Discussions:- general deductions question, Assignment Help, Ask Question on general deductions question, Get Answer, Expert's Help, general deductions question Discussions

Write discussion on general deductions question
Your posts are moderated
Related Questions
i want some problems with solutions on karnataka value added tax 2003

Background information Jim set up a limited company; Show the Way Limited (The Company), along with his father in 1983. The company is incorporated in Scotland and has been reg

a. What are the short-term and long-term market reactions after an IPO? What are the potential reasons for these returns? b. How do you explain the lack of IPO activity in the U

In an effort to reduce alcohol consumption, the government is considering a $1 tax on each gallon of liquor sold (the tax is levied on producers). Suppose that the supply curve for

Describe the relationship between (i) future value and interest rate; (ii) future value and time period. What about the relationship between the present value and the same variable

How does this variation affect people and corporation?

Hi Dear, Could you please help me with lots of assignments in Tax Individuals within 2 hours. That mean I will send you my questions and the experts will solve the questions with


Hi Dear, Could you please do the online exam for ( Tax Individuals US). The exam will be ( short answers and MC ). The exam will open about one and half to two hours. The exam w

which type of tax, direct or indirect is applicable in any country (example underdeveloped countries)? Why? Show your critical areas and weaknesses.