Analyze Tax Law Issues - Income and Deductions - Law Assignment Help

Assignment Task:

Question 1:

1. Capital Gains Tax Weighting Identification of material facts regarding Sophia’s capital gains tax (CGT) concerns in the given scenario and the critical discussion of CGT consequences relevant to the assignment question. 
2. Identification and analysis of legal issues / legal questions and relevant taxation law in regards to Sophia’s capital gains tax (CGT) (e.g. ITAA 1936 and ITAA 1997). 
3. Thorough yet the succinct application of tax law (e.g. ITAA 1936 and ITAA 1997) to material facts in Sophia’s capital gains tax (CGT) scenario. 
4. Correct information and taxation law regarding the capital gains tax (CGT) have been used and properly cited. A detailed analysis has been performed. 
5. Detailed and accurate capital gains tax (CGT) conclusions are reached from the discussions. 

Question 2: Income and deductions

 Issue: The issue to be discussed is whether Ava’s outgoings are an allowable deduction or expenses of a private and domestic nature. Students should be able to show their understanding of the character of the outgoings being examined. 

Law and Application: Discussion of the nature of each of the different types of outgoings and apply them to the relevant law. Set out the legal principles that will be used to address the problem. Source legal principles from cases and legislation. 

Law and Application: Students need to discuss whether: 

• There is a connection between the outgoings and the assessable income so that the outgoings are incidental and relevant to the gaining of assessable income.
• Or whether the outgoings have the character of being a private or domestic expense.
•  Set out the legal principles that will be used to address the problem. Source legal principles from cases and legislation. Conclusion: Stand back and play ‘the judge.’ Choose the arguments and conclusions you think are the strongest and articulate what you believe to be the appropriate answer to the given scenarios. 

  Conclusion: Stand back and play ‘the judge.’ Choose the arguments and conclusions you think are the strongest and articulate what you believe to be the appropriate
  answer to the given scenarios.

QUESTION 1 

Sophia has visited her accountant, John and has provided him a listing of the transactions she has undertaken throughout the financial year to assist John in completing Sophia’s 2018 income tax return. The listing of the transactions is as follows: 

a) Sale of a block of land in Ninety Mile Beach for $800,000: Sophia purchased the land for $130,000 as an investment in 1991. She also paid $800 in stamp duty, $1,200 in legal fees. Before purchasing the land Sophia had to secure a bank loan and paid interest totaling $27,000. During the period of ownership her council rates, water rates, and insurance totaled $18,500. In January 2008 a dispute occurred with a neighbor over the use of the land and legal fees incurred amounted to $8,000 in resolving this dispute. Before putting the property on the market $1,500 was spent to remove a number of large dangerous pine trees that were on the land. Advertising, legal fees and agent's fees on the sale of the land were $25,000. 

b) Sale of Sophia’s shares in ABC Co for $32.20 per share. Sophia had 2000 shares: Sophia paid a 1% brokerage fee on the sale. She initially purchased the shares for $1.50 per share in 1983. 

c) Sale of a stamp collection Sophia had purchased, from a private collector, in January 2018 for $33,000: she sold the collection at auction for $23,000. Auction fees totaled $3,000 for the sale. 

d) Sale of a Bob Marley Guitar for $45,000: It was initially bought for $70,000 in 2003. 

Advise Sophia of the capital gains tax consequences of the above transactions. Ignore indexation. Your answer must include references to relevant tax law and or cases.

QUESTION 2  

Ava visits his accountant David and asks him whether the following outgoings incurred by her are allowable deductions. Ava has recently completed her medical degree and taken up employment in Sunshine Hospital. Ava incurred the following outgoings: 

(a) Travel expenses to Sunshine Hospital for the job interview $320 

(b) Ava moving expenses from her home in Darwin to relocate in Sunshine, Victoria $1800

(c) Payment of white’s uniform which are compulsory for doctors to wear at work $200 

(d) Ava paid $18,200 childcare expenses for her two-year-old daughter. 

(e) Ava made phone calls from her home phone to Sunshine Hospital after hours to check on patients  this costs Ava $200 

(f) When working evening shifts, Ava purchased $570 food from the hospital café bar. 

(g) Ava received a $207 speeding fine when she was running late to Sunshine Hospital for an emergency visit. 

(h) Ava incurred a $330 travel expense to and from work. Advise Ava of the deductibility of the above-mentioned transactions. Your answer must include references to relevant tax law and or cases. 

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