Solution-Advise Jack and Jill of their income tax

Advise Jack and Jill of their income tax consequences

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Reference no: EM132631928

Question - Jack and Jill jointly own and run a bed and breakfast business. The business is run through their partnership, J & J Bed and Breakfast. Jack and Jill also own an investment property together which they purchased in equal proportions. During the year, they undertook the following transactions:

Purchased furniture for their bed and breakfast business for $10,000 on 21 December 2005. The furniture is expected to last for 20 years.

Purchased an air-conditioner for their investment property for $6,000 on 15 June 2017. The air-conditioner is expected to last for eight years. Jack and Jill contributed to the purchase price of the air-conditioner equally.

Advise Jack and Jill of their income tax consequences arising out of the above information under both the diminishing value method and the prime cost method (if relevant) for the year ended 30 June 2017. Assume that the business does not qualify as a small business entity.

Reference no: EM132631928

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Advise Jack and Jill of their income tax consequences

Reference no: EM132631928

Reference no: EM132631928

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