ACC3TAX Assignment S1 2021 Group Assignment Instructions Carefully read the instructions below before submitting your assignment Due date: 11:59 pm on Monday 17 May 2021. Weight: 20% of the total...

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ACC3TAX Assignment S1 2021
Group Assignment Instructions
Carefully read the instructions below before submitting your assignment
Due date: 11:59 pm on Monday 17 May 2021.
Weight: 20% of the total ACC3TAX assessment (marked out of 40 marks, then halved).
Word Limit : 1,200 – 1400 words, a slight increase to accommodate multi issues - 10% tolerance.
Groups: Groups of 2 students. Assignments submitted individually will NOT be accepted (Learning Access Plan requirement excepted).
Submission: One assignment per group must be submitted once only electronically via LMS link. Submit your group assignment in one single Word or PDF file. No hard copy required. Late Submissions will be penalised in accordance with the Late Submissions Policy. (https://policies.latrobe.edu.au/document/view.php?id=148).
Referencing and assignment format: Given this assignment is a report style format, there is no requirement for referencing to advise the source of any materials. Your research of the law will be reflected in your answers. A model solution of a previous assignment has been made available so students clearly understand the format of the assignment that must be followed. The format for this assignment is report style in a table of 3 columns addressing,
1. the broad issue,
1. discussion of the issue, identifying the relevant statute / common law and explaining how the tax law applies to the facts, that clarifies the treatment of the issue for tax purposes, and
1. importantly, calculate the correct amount.
Assessment criteria: Assignments will be assessed against the SILOs for the assessment. Assignments will be assessed based on objective demonstration of the following, when working as a team:
1. Engagement of critical thinking and interpretation skills to correctly identify the issues to be analysed in the case study.
1. Application of critical thinking, interpretation and analytical skills of tax law / case law to develop a meaningful analysis of the issues identified.
1. Correct application of tax law / case law to calculate tax liability relevant to the tax entity. Calculations must be explained / supported by applicable law.
Graduate capabilities: The main Graduate Capabilities assessed in this assignment:
· Critical Thinking / Creative Problem-Solving – These skills are assessed based on the student’s demonstrated capacity to research the law and make a correct and coherent position of how taxation law applies grounded on legal provisions and case law precedents. 
· Writing – These skills are assessed following the report style format, but should be clear, concise and correct and easily understandable. Students are to present a well organised report written in plain English, with proper application of legislation and case law.
· Quantitative Literacy – These skills are assessed based on the demonstrated capacity to correctly interpret the law and apply it to the facts provided in the question.
Feedback: Specific written feedback will be provided via LMS. General verbal feedback will be provided in workshops. 
Academic Integrity: All assignments are electronically checked for similarity, plagiarism and collusion. Assignments are also checked for contract cheating (where a student submits an assignment which is not of their own authorship, e.g. purchase of assignments through specialised websites). For explanation of the plagiarism policy refer to: https://www.latrobe.edu.au/library/assignment-thesis-support/referencing. Suspected cases of academic misconduct will be reported to the Academic Integrity Adviser for the appropriate measures. Refer further to the Academic Integrity policy in the SLG.
Special Consideration and Extensions: Extensions to the deadline will be granted only in exceptional and unforeseen circumstances in accordance with the Special Considerations policy and procedures. (https://policies.latrobe.edu.au/document/view.php?id=205).
Marking:
This is a broad-based enquiry seeking out student’s understanding of multiple taxation issues.
This assessment covers the contents of weeks 1- 9 and the format required is a 3 column research report, that is clear, concise and correct.
Such a report would be useful for example, if a partner was required to examine how a client’s taxation liability was calculated and could easily review all the issues and quickly identify any specific issue.
The ACC3TAX assignment is designed so that students can demonstrate their taxation knowledge and show how they have determined the taxable income of an entity and calculated required taxation liabilities.
The assignment is worth 20% of your assessment, and is based on 40 marking points, that will then be divided by 2.
Allocating Marks:
· Bonus marks – markers can use discretion if a student has done excellent research – but maximum of 40 marks overall.
· Zero mark – where a group’s answer does not address an issue or is incorrect.
· Full Mark – where a group’s answer has:
· 1. correct law (statutory / case law),
· 2. correct reason (applying facts including supporting references such as ATO Rulings etc), and
· 3. correct calculation.
· Half a mark, where a group’s answer is partially correct. That is, answer is not fully correct given incorrect law references / incorrect reason / incorrect calculation.
Rubric – Marks allocated per Issue
As a guide to assist the weighting of your deliberations and to help identify the number of different sub-issues within each main issue, the marking allocation, not including bonus marks, is:
Issue 1 -4 marks
Issue 2 -2 marks
Issue 3 -6 marks
Issue 4 -5 marks
Issue 5 -3 marks
Issue 6 -3 marks
Issue 7 -4 marks
Issue 8 - 3 marks
Issue 9 -10 marks
Total XXXXXXXXXXmarks worth 20% of the assessment
Group Assignment Question – ACC3TAX S1 2021
This group assessment broadly covers the contents of weeks 1-9, and specifically focuses on the overall calculation of tax impacts for a trust (including derivation of income and incurrence of expenses, and application of the net trust income to the beneficiaries, and resultant impact on tax liability to the beneficiaries.)
It is designed to simulate a client-advisor real life scenario, where students are required to apply teamwork, interpretation of tax law, taxation rulings, and case law, critical analysis and numeracy skills in order to provide supporting evidence for advice to either a tax partner or client.
The basis of advice is documented through a 3 column preliminary research report, which will support future communications as required.
Part 1 is the basis for determining the trust’s net income
Part 2 You will then calculate the trust net income and advise the impact of the distribution to the beneficiaries. You will need to calculate the tax liability of nominated beneficiaries.
Case study: Joe’s Mobile Gourmet Pizza & Pasta (JMGPP)
Giuseppe Gioia, his wife Giulietta and mother Giovanna, operate a mobile gourmet pizza business, through a family discretionary trust trading as Joe’s Mobile Gourmet Pizza & Pasta (JMGPP).
JMGPP operates in Melbourne and sometimes country Victoria based on suitable bookings, specialising in traditional flavoursome pizza and pasta, that have a gourmet edge. In addition, JMGPP creates special menus of pizza and pasta that specifically cater to clients’ festivities and national holidays.
Giuseppe Gioia, the trustee of JMGPP engages your services for the preparation of the 2019/20 trust tax return.
On 24 April 2021 Giuseppe sent you the following email:
From: Giuseppe Gioia < XXXXXXXXXX>
Sent: Saturday, 24 April 2021, 9.30 am
To: Tax Accountant
Subject: The JMGPP Trust - Tax return 2019/20
Dear Tax Accounting Team,
Thank you for catching up with us last week. We ask that you please prepare our family trust tax return.
You see, we intend to lodge our own personal tax returns on my.gov.au, so we will wait your advice about our trust distribution of income to be included in our tax returns.
We can then include this amount to calculate our tax liability. This is because, we already know how to use taxcalc.com.au and should have a reasonable approximation of our tax liability. In addition, the Commissioner of Taxation issues a Notice of Assessment, so our tax liability will be confirmed when we receive that.
Please advise the amounts to be distributed to each of the beneficiaries and their consequent tax impact. But just in my mum’s case, could you please calculate her tax liability because we understand it will be impacted by the SAPTO, but not sure how you calculate that. (It is not addressed on taxcalc.com.au)
Accordingly, the relevant details below should be of assistance to you.
Details relevant to the JMGPP Trust Tax Return
1. Inheritance - family home, furniture and car
Dear papa passed on 21 Feb 2019, and in his will, he left me everything, which was essentially our family home, the household effects and his car. Naturally of course, papa requested I take care of my mamma who receives an old aged pension. ($24,770 for XXXXXXXXXXAfter the funeral, it took some time to go through all the household effects while also dealing with the grief and emotional issues. Mamma eventually accepted that I should sell everything (but she kept her favourite kitchen appliances and some sentimental things like photos), and as I was sorting things, it gave me time to also locate the appropriate paperwork. Mamma now lives with me and my family. We love her with us, and she loves Giorgio, our son.
I used the money generated from the inheritance to create the family trust business including investing in BHP Shares and bought a rental property.
I sold the following assets I received from my inheritance. Please confirm if there is a tax impact as I figure I must include a lot for the capital gains.
· House - Dad purchased our family home in 1990 for $135,000 and there were $5,000 of costs to buy and register it in his name. Its market value at the date of death was $800,000 I sold it in October 2019 for $835,000 and there were $15000 costs for sale. So that is a massive gain, but I heard I am eligible for 50% discount - right?
· Household furniture and goods – I reckon the cost of these was in the order of $11,000, and I was so surprised that I sold them for $12,500 in July XXXXXXXXXXSo that’s $1,500 gain - right?
· Dad’s Alpha Romeo - Back in 1990 dad purchased a new Alpha Romeo for $46,990 drive away price. But I only sold it for $9,990 in August XXXXXXXXXXA big loss, right?
2. Creating the business
I took up a redundancy offer in early December XXXXXXXXXXBut I still needed to make some money for the family, so after papa died, I thought to myself, why not start up my own small business and I could have mamma working with me, and we could share that lovely time together. Mamma is the best cook. My residence is my working base and I start work from the moment I leave my driveway, until I return home, so that is very convenient. So, I rang some lawyers and they recommended to me after considering the partnership, trust and company structures and my personal circumstances including my ambitions, that I should set up a Small Business Entity in the form of a trust, and register the bus in my name as trustee of the trust. The lawyers provided me a standard discretionary trust deed that created the trust and their advice cost me $1,900 in their invoice dated 25 June 2019, although it was 2 weeks before I got around to paying it.
3. Mobile business restaurant income
I am not sure if you have seen our bus travelling around Melbourne but my mother and I operate a restaurant using a mobile bus and we specialise in providing home-made gourmet pizza and pasta, at St Kilda Beach but also set up at all sorts of community events as booked by clients. For the 2020 financial year, we had the following:
· Sales of $168,850 (cash and credit received before 30 June)
· Our credit card sales at 30 June outstanding were $10,000 and all were received in our account in July 2020
· Purchases for the year were $25,000,
· Opening stock was $0, and
· Closing stock was only $1,000.
· Outstanding bills owed. We had several bills on the table outstanding on 30 June 2020 that were calculated to be $5,000.
4. Investment Earnings
I purchased shares in BHP as trustee of the JMGPP Trust which paid a dividend of $10,500, being 80% partially franked. These dividends were paid in April 2020 to our trust business account as we had instructed.
I also purchased a 2nd hand rental property which I put in the name of the trust and received $15,000. My travel expenses to collect rent and inspect the property were moderate and only amounted to $500, and I calculated depreciation on rental plant to be $2,000.
5. Interest, salaries, drawings
I drew down a salary of $500/week and on one occasion Giulietta withdrew $4,000 from the business to help pay for a relative’s medical expenses. Of course, on both matters, I paid 9.5% Superannuation Guarantee on the relevant amounts. In addition, I received $1,000 interest from the trust in my loan account, which is fair because I set up the business settling the contribution to purchase the bus and original fit-out which was sourced from my inheritance papa had left me. The interest rate is very low and competitive - there has been no excessive benefit to me.
6. Purchase of new Bus
Having created the trust in June 2019, I commenced the busines and I purchased a Bus costing $50,000 on 1 July 2019 used for 100% business use.
The registration was $1,600 and insurance $3000, petrol was $16,000, the services were covered under warranty.
7. Depreciation & Repairs
In addition, to the bus, we purchased various plant and machinery for the kitchen and installed them into the bus. The cost of the fit out was $25,000.
After we bought the rental property, the tenants asked to repair the hot water system which wasn’t working properly, and the plumber repaired it at first for $500, but then we still had to replace it with a new unit at a cost of $2,500 including installation.
8. Various other expenses
Well this is the easy part, just listing our expenses which are clear.
· Casual wages (market rate) paid to Giorgio (16 years - No SG)$5,000
· Provision for Doubtful debts$1,200
· Lottery Tickets $50

9. Trust Net income and distribution to beneficiaries
.
Based on the above information, please determine the net trust income.
I have resolved that the dividends and their tax offsets flow directly only to Giulietta
Further In my discretion, I had decided that my distribution for the beneficiaries of the trust at 30 June was:
· Giorgio - $416, but note that we also paid $10,000 to Giorgio’s private school education - but that won’t affect him will it?
· Mamma - $10,000 - I think I have distributed a little too much to Mamma so she might have to pay a bit of tax - please advise her tax liability
· Giulietta - 20% remaining trust Income
· Giuseppe - 80% remaining trust Income
That should be all you need for your deliberations. I look forward to hearing back from you about our trust’s completed income tax return, and consequent impact on us.
Thank you very much.
Kind regards,
Giuseppe Gioia
(Trustee of the Joe’s Mobile Gourmet Pizza and Pasta Trust)
Required
Part 1
Prepare a report to put into JMGPP file which you can use as background in discussion with the Partner, and subsequently when you need to provide further advice to the JMGPP Trust.
Format of your report. You must:
· address the 9 main issues raised using the same numbering system / headings listed above in Giuseppe Gioia’s email.
· adopt a report style approach using 3 headings, and apportion the column width similarly
· do not provide 3 equal width columns - the ‘Issue’ is only 2 or 3 words, the Amount’ only has numbers in it (no words), but the Law is the substantive column which is why it is the widest column, and is where you will put your words:
Issue
Law that applies, including Reasons (& Common Law/Tax Ruling)
Amount ($)
Effect on taxable income
Be succinct given the word limit, and in your discussion make sure you state:
· the relevant legislative authority and/or case law authority
· a reason why the facts apply to the law, explaining the impact of the tax effect, and
· the final effect on taxable income / tax liability under the ‘Amount’ heading. e.g. It will be (+) when it increases taxable income. It will be (-) if it decreases taxable income.
(30 marks detailed in rubric)
Part 2
Based on your report, determine the net trust income of the JMGPP Family Trust and advise the impact of tax to the beneficiaries. For Giovanna Gioia a pensioner, calculate the final tax refund/liability (Hint: you can use taxcalc.com.au and cut and paste the calculation) and focus on calculating yourself the SAPTO for the year ending 30 June 2020, stating the applicable legislation.
You can assume all that was required under Subdiv 207-B ITAA97and Division 6E ITAA36 to permit the streaming of franked dividends to Giulietta, has been done by the trustee and his previous advisors in setting up the trust deed. That is
1. there is a franked distribution
2. the trust income includes the franked distribution and tax offset
3. the trust deed empowers the trustee to stream dividends (and capital gains),
4. the trustee made Giulietta specifically entitled, and
5. the trustee recorded the specific entitlement in the set time
For dividends, this is before the end of the financial year (and for capital gains, this is within 2 months of the end of the income year).
(10 marks detailed in rubric)
ACC3TAX S1 2021 Assignment Feedback Form JMGPP Trust XXXXXXXXXXTotal Score /40 = /20
1. Inheritance Family home, Furniture and Car

·
·
· .
·
Bonus Marks
XXXXXXXXXXout of 4
/ 1
/ 1
/ 1
/ 1
Comments
2. New business costs

·
· .
Bonus Marks
out of 2
/ 1
/ 1

3. Mobile Pizza income

· .
·
·
·
· .
·
Bonus Marks
out of 6
/ 1
/ 1
/ 1
/ 1
/ 1
/ 1

4. Investment Earnings

· .
·
·
· .
·
Bonus Marks
out of 5
/ 1
/ 1
/ 1
/ 1
/ 1

5. Salaries, drawings, superannuation, and interest on capital

·
·
·
Bonus Marks
out of 3
/ 1
/ 1
/ 1

6. Purchase of new Bus

·
·
·
Bonus Marks
out of 3
/ 1
/ 1
/ 1

7. Repairs and depreciation

·
·
·
·
Bonus Marks
out of 4
/ 1
/ 1
/ 1
/ 1

8. Various other expenses

·
·
·
· Bonus Marks
out of 3
/ 1
/ 1
/ 1

9. Tax Distribution

· S 95 – Net trust income
· Impact of streaming Dividends to Giulietta only
· Impact of Distribution to Adults
· Impact of Distribution to Giorgio – a minor
· Income tax liability Giovanna calculating also SAPTO
· Bonus Marks
out of 10
/ 1
/ 2
/ 2
/ 2
/ 3

5

1

ACC3TAX Assignment S1 2021

Group Assignment Instructions

Carefully read the instructions below before submitting your assignment

Due date:
11:59 pm on Monday 17 May 2021.

Weight
:

20% of the total ACC3TAX assessment (marked out of 40 marks, then halved).

Word Limit

:
1,200


1400
words, a slight increase to accommodate multi issues
-

10% tolerance.

Groups:
Groups of 2 students.

Assignments submitted individually will NOT be acce
pted (Learning
Access Plan requirement excepted).

Submission:
One assignment per group

must be submitted once only electronically via LMS link.
Submit your group assignment in one single Word or PDF file. No hard copy required. Late
Submissions will be pe
nalised in accordance with the Late Submissions Policy.
(
https://policies.latrobe.edu.au/document/view.php?id=148
).

Referencing and assignment format:
Given this assignment is a report style format, there is
no

requirement for referencing
to

advise the so
urce of any materials. Your research of the law will be
reflected in your answers. A model solution of a previous assignment has been made available so
students clearly understand the format of the assignment that must be followed. The format for
this a
ssignment is report style in a table of 3 columns addressing,
1)

the broad issue,
2)

discussion of the issue, identifying the relevant statute / common law and explaining how
the tax law applies to the facts, that clarifies the treatment of the issue for tax p
urposes,
and
3)

importantly, calculate the correct amount.
Assessment criteria:
Assignments will be assessed against the SILOs for the assessment.
Assignments will be assessed based on objective demonstration of the following, when working as
a team:
1)

Engagement of critical thinking and interpretation skills to correctly identify the
issues to be
analysed in the case study.
2)

Application of critical thinking, interpretation and analytical skills of tax law / case law to
develop a meaningful analysis of the issues identified.
3)

Correct application of tax law / case law to calculate tax liability relevant to the tax entity.
Calculations must be explained / supported by applicable law.
1
ACC3TAX Assignment S1 2021
Group Assignment Instructions
Carefully read the instructions below before submitting your assignment

Due date: 11:59 pm on Monday 17 May 2021.

Weight: 20% of the total ACC3TAX assessment (marked out of 40 marks, then halved).

Word Limit : 1,200 – 1400 words, a slight increase to accommodate multi issues - 10% tolerance.

Groups: Groups of 2 students. Assignments submitted individually will NOT be accepted (Learning
Access Plan requirement excepted).

Submission: One assignment per group must be submitted once only electronically via LMS link.
Submit your group assignment in one single Word or PDF file. No hard copy required. Late
Submissions will be penalised in accordance with the Late Submissions Policy.
(https://policies.latrobe.edu.au/document/view.php?id=148).

Referencing and assignment format: Given this assignment is a report style format, there is no
requirement for referencing to advise the source of any materials. Your research of the law will be
reflected in your answers. A model solution of a previous assignment has been made available so
students clearly understand the format of the assignment that must be followed. The format for
this assignment is report style in a table of 3 columns addressing,
1) the broad issue,
2) discussion of the issue, identifying the relevant statute / common law and explaining how
the tax law applies to the facts, that clarifies the treatment of the issue for tax purposes,
and
3) importantly, calculate the correct amount.

Assessment criteria: Assignments will be assessed against the SILOs for the assessment.
Assignments will be assessed based on objective demonstration of the following, when working as
a team:
1) Engagement of critical thinking and interpretation skills to correctly identify the issues to be
analysed in the case study.
2) Application of critical thinking, interpretation and analytical skills of tax law / case law to
develop a meaningful analysis of the issues identified.
3) Correct application of tax law / case law to calculate tax liability relevant to the tax entity.
Calculations must be explained / supported by applicable law.
Answered 2 days AfterMay 09, 2021ACC3TAXLa Trobe University

Solution

Riddhi answered on May 11 2021
20 Votes
Part 1 –
1. Inheritance – Family Home, Furniture and Car.
Issue
Law that applies, including Reasons (& Common Law/Tax Ruling)
Amount ($)
Effect on taxable income
Old Aged...
SOLUTION.PDF

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