Sami receives rental income in relation to a house he owns in an inner suburb of Sydney.
The house is fully furnished, and Sami has had the same tenant for several years.
Sami also receives income from his business as an event organiser. He specialises in organising parties to celebrate family occasions such as engagements, birthdays, wedding anniversaries, and retirements.
Events organising requires a lot of planning and many of Sami’s clients prefer to meet with Sami in his Sydney CBD office, rather than remotely via the internet. Sami would like to make his clients feel comfortable in an informal setting, so he decides to replace the large reception table in his office with a smaller wooden coffee table. On 3 August he sees the perfect table on sale for $295 and decides to purchase two – one for his office and one for the rental property. Sami estimates that each of the coffee tables would have an effective life of 3 years.
It is now time for income tax returns to be lodged.
Required A:
Advise Sami what amount, if any, he can claim for the purchase of the coffee tables. (12 marks)
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Explain what methods could be used to calculate the claim. (8 marks)
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In your response give reasons and refer to sections of legislation and cases, where relevant