Due Date: 19-May-2021
Return Date: 11-Jun-2021
Word limit: 1700
Group Assessment: No
Submission method options: Alternative submission method
This is the second component of the problem solving assessment task. Your response to Part B should also consider relevant data provided in Part A and feedback provided in respect of Part A.
Part B Question
Bill decided not to sell the property opting instead use the apartment as a bed and breakfast following an increased interest in regional holidays. It was available for bookings from the beginning of February. He did however sell two paintings that had been hanging in the studio apartment. He had purchased them in 2009 for $700 each, he sold one for $450 and the other for $900.
At the end of the current financial year the following activities had occurred.
Opening stock (1st July)
Closing stock ( 30 June)
Occupancy expenses( rates, electricity ets)
Travel( actual cost of work van)
Installation of fitting for new storage area
Painting of internal and external walls, excluding new storage space
Phone and internet store
Loan payment on 1 hectare property( includes interest on loan for year $4,752
Wages expense includes:
· superannuation for two employees;
· payment to a part time retail assistant who works 20 hours per week at $25.50;
· payment to his spouse who does cleaning, and occasionally works in the store for approximately 4 hours per week at $32.00 per hour; and
· wage to Bill of $52,000.
The wage to Bill and payment to his spouse are deposited into a joint account.
From this joint account the following transactions occurred:
Bed and Breakfast activities (30 days of bookings from February)
Expense relating to advertising online
Rental property in spouses name only (expenses paid from joint account)
Income (net of agents fees)
Repairs to bathroom expenditure
Lawn upkeep expense
Loan Payments (includes interest on loan for year $11,550)
Rates, Insurance and water fees
Bills spouse also worked as a part time nurse earning $47,000 with tax withheld of $6,604 and incurred $2,300 in employment related expenses such as uniform, professional subs and training costs.
Bill has paid $35,700 PAYG installments.
1. Prepare a report explain what amounts would or would not be included in the calculation of the tax payable for Bill to be retained in a work file. (15 marks)
1. Prepare a draft letter to Bill advising the tax position. (5 marks)
Both parts can be submitted in a single file. Ensure all calculations are clearly detailed (Total of 20 marks for Part B).
This assessment task will assess the following learning outcome/s:
· be able to identify and explain the rules of law relating to taxation law topics covered in the subject.
· be able demonstrate a capacity to engage in legal research.
· be able to use legal research skills to apply the law to legal problems relating to taxation so as to reach a solution.
· be able to analyse legal rules so as to differentiate between possible outcomes to the legal issues arising from novel fact situations.
Covering topics 6 to 11, this assignment has been designed to ensure that students are able to identify and apply legislation, rulings and case law to the issues identified as well as demonstrate the ability to analyse the issues fully and apply this knowledge to a hypothetical, practical situation and communicate to a diverse audience.