Assignment - ACC304 Taxation Law – Assessment 3
Subject Code:
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ACC304
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Subject Name:
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Taxation law
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Assessment Title:
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Individual assignment assessment 3
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Weighting:
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20%
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Due Date:
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Sunday 11.30pm AEST of week 9
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Elwood Blues and his wife request that you provide them with tax advice in the form of a singlebusiness letteraddressing the following taxation issue that they have raised. Please use 11⁄2 line spacing. The letter should not exceed 500 words.
Please reference the appropriate law (ITAA), cases and Taxation Rulings in your letter.This is worth marks.Do not quote using hyperlinks to websites as no marks will be awarded. Do not quote text book paragraphs.
There is no need to provide a reference list at the end of the letter.
Elwood Blues address: Unit 52
246 Queen Street Brisbane, QLD, 4000.
Elwood Blues is one of your new clients. Elwood has the following questions and he requires your analysis and advice as to the application of the law.
ACC304 Assignment
Assessment 3
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Part 1
Starting a new life, Elwood arrived in Australia on 1 July 2017 with his wife and two children. Elwood and his family have been transferred to Australia for a minimum of 3-years. Elwood likes the low interest environment and purchases a home. He moves in immediately. He registers the telephone and electricity in his name. On 1 January 2018, he adds a new kitchen to the home at a cost of $20,000.
Inda, his wife started part-time employment as a sales manager. The children settle happily into the local school. Elwood rents out their former home in the United States and the rent is paid into an American account he can access from Australia.
Elwood joins the local gym and becomes a member of the local Chess club. He attends regular meeting and is appointed President after a short period of time.
Inda is asked to work from home 2 days per week as the company is closing their Brisbane office. The company can no longer afford the commercial rent. Inda agrees reluctantly as she loved the work atmosphere.
Required
Elwood and Inda request that you provide them with tax advice in relation to their residency for taxation purposes. Students should quote legislation, appropriate rulings and cases. Marks will be awarded for the format of your business letter and appropriate use of language.
Part 2a – Tax Return Information
Jake Smith is an Australian resident and also one of your clients. Jake has the following events during the year.
During the entire 2018 income year, Jake worked for MD & A Architects. Jake was provided with his PAYG Payment Summary for the period 1 July 2017 to 30 June 2018. Gross salary was $86,000. Payg tax withheld was $19,820.
Jake uses his car for work. Jake was reimbursed for 6,000 kilometers travelled during the year at 75 cents per kilometer. PAYG withholding of $1,500 was deducted during the year.
Jake earns interest of $100 during the year (gross). Jake did not provide the bank with his tax file number.
Jake received an unfranked divided of $3,500 on 18 June 2018. Jake participated in a dividend reinvestment scheme so that he received an additional 198 shares in the company.
Jake purchased 1,000 ANZ bank share on 1 March 2015 at $22 each. Brokerage costs on purchase were $50. Jake sold 500 ANZ bank shares on 1 June 2018 for $24 each. Brokerage costs on sale were $55.
On 12 May 2018, Jake sold his “cricket bat” collection. This consisted of 5 cricket bats that were signed by famous people. The great “Sahin Tendulkar” has signed one of the bats. Ricky pointing had signed one of the bats which was worth considerably less than
ACC304 Assignment
Assessment 3
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the bat signed by Tendulkar. Jake purchased the bats between 1999 and 2004 for a total cost of $2,600. He sells the entire collection for $900.
Jake failed to keep a log book but wishes to claim his Mazda 3 motor car if possible. Jake’s diary notes indicate he travelled 7,420 kilometers. Total car expenses including depreciation are $6,200. He estimates (has a guess) that his business percentage is 95 percent. Jake does not have a second motor car.
Jake owns a mobile phone which he uses for work. His mobile telephone call costs for the 2018 income year totalled $1,400. Jake estimates that 60% of these calls were work- related. Jake failed to keep his receipts and can’t provide any material documentation.
On 1 May 2018, Jake paid the invoice which he received from his previous tax agent for the preparation and lodgement of his income tax return for last year. The tax agent's fee was $400.
Jake is not married and does not have health cover.
Advise Jake as to the tax implications of each of these 10 items and the impact it will have on his tax return. Students should quote sections of law where appropriate.
In addition, students should calculate Taxable income only (showing brief workings).700 words (1 paragraph on each item)
Part 2b – Negative Gearing
Jake while talking to a friend (Max) at a party is informed about a topic called “negative gearing”. Tax advantages were discussed so Jake is seeking your advice. He was also told about potential changes should there be a change in Government.In your own words, explain “negative gearing” to Jake and the potential changes that may occur.In your own words,students should discuss the potential tax benefits for someone earning $100 k per year.
300 words
ACC304 Assignment
Assessment 3
3
Assignment - ACC304 Taxation Law
Required:
This assignment is to be completed by individual students. All questions, must be attempted.
The assignment must be submitted before the above due date to avoid any late penalties. Please make sure you follow the usual assignment presentation guidelines especially those relating to presentation of written work, late policy and academic integrity.
Please note that a word limit exists for all questions.Submissions that exceed the word count (50 words per question) by more than 10% will cease to be marked from the point at which that limit is exceeded.
Submission:
The assignment will need to be submitted electronically through the student portal – use the link under “Assessments” to submit the information.
Referencing (Part 2B only):
Any sources that you use need to be acknowledged in order to avoid plagiarism. Information on referencing can be found in theGuidelines for Referencing and Presentationat the Kaplan website.
In-Text Referencing and the Reference List (Part 2B only):
Sources of information must be citedbothin the body of the text (in-text referencing) and the end of the assignment (reference list).Failure to do so will result in penalties.Any documents or books or other references you use will require referencing.
Penalties Regarding Referencing (Part 2B only):Incomplete reference list – deduct 1 marks
OTHER IMPORTANT INFORMATION
ACC304 Assignment
Assessment 3