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HI5028 TAXATION
T3, 2014 ASSIGNMENT 1
Due date: Friday Week 6
Instructions:
This assignment is to be submitted by the due date in both soft-copy (Safeassign – Bb) and hard copy.
The assignment is to be submitted in accordance with assessment policy stated in the Subject Outline and Student Handbook
It is the responsibility of the student submitting the work to ensure that the work is in fact his/her own work. Ensure that when incorporating the works of others into your submission that it appropriately acknowledged.
Maximum marks: 20 (20%)
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Part One: Income tax rates
Martha is a resident who is 40 years old and has $170,000 of taxable income for the current income year. Calculate her basic income tax liability.
Part Two: Ordinary income
In 1979, a doctor who lived and worked in Sydney purchased a 20 acre parcel of rural land on the outskirts of the city for $100,000. Over the years, he used the property as a “hobby farm” for growing “fruit trees” and as a “weekend retreat” for relaxation. Recently, the surrounding area has become more developed and the property has increased in value substantially. The doctor has also recently run into financial difficulties as a result of a malpractice suit and he is considering selling the property.
Advise him as to whether he would be required to include any amount in his assessable income as a result of the sale.
Part Three: General deductions
Compare the decision in FC of T v Anstis (2009) with the decisions in Lunney and Hayley v FC of T (1958) and FC of T v Maddalena. Is it possible to reconcile the outcomes in these cases?
Part Four: Provisions that deny or limit deductions
Discuss some of the circumstances in which entertainment expenditure is deductible?