Reference no: EM133140240

HI6028 Taxation Theory, Practice & Law

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

A. John recently purchased a Theatre Hall which was in poor condition. Before starting the hall, it needed to repair a portion of the ceiling, but he decided to replace the whole of the ceiling with different but better materials. The new ceiling, in addition to enhancing the appearance of the hall, improved the acoustics. The total cost of the material and of erecting the new ceiling was $210,000. It was estimated that the cost of repairing the ceiling would have been $150,000.

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:

1. Facts of the scenario
2. Relevant laws and cases
3. Application of laws and cases
4. Conclusion

B. Sanjeev is employed as a marketing manager of the Theatre Hall. He requires to travel extensively during the year for work-related purposes using his car. Discuss the ways Sanjeev might be able to claim deductions for his car expenses. (Maximum 400 words)

QUESTION 2

After completion of your course, you start working at an accounting and tax office. Julia is your first client. She requires to lodge his income tax for 2021/22. She gave her annual income and deduction below. Calculate her Total Assessable Income, Taxable Income, Tax Liability, Medicare Levy and Medicare Levy Surcharge, if applicable, for the taxpayer (Julia) with the information below:

• Julia is a resident single mom with two dependent children (7 and 4 years old) taxpayer of Australia for the tax year 2021-2022
• Her Taxable Salary earned is $109,000 (Including tax withheld), having no private health insurance.
• She had a $11,000 deduction.
• Julia has a student loan outstanding for his previous studies at Sydney University of $35,000.
• Julia's employer pays superannuation guarantee charge of 10% on top of her salary to her nominated fund.
• Julia earned a passive income of $7,000 from the investments in shares in the same tax year.

Hint: The following website can be used to cross-check your answers, but you need to provide detailed calculations, rates and explanations with screenshots of rates from the ATO website.

Attachment:- Taxation Theory.rar