MP223 - Tax Law & Practice, Taxable Income & Payable, Keri Sold An Investment Property Case Study - Tax Law Assignment Help

Assignment 

QUESTION 1  

Determine the taxable income and the tax payable /refundable of the following two individual resident taxpayers.
(a)During the income year ending 2020, Jonathan has a gross salary of $155,000 (PAYG tax withheld is $48,500), a fully franked dividend of $56,000, and an unfranked dividend of $7,000. He had incurred a work-related traveling expense of $ 8,500. He bought a laptop for $2,500 on 01/07/2019 and used it mainly for work purposes. He estimates that he used the laptop 80% for work. For tax purposes, he could use the laptop for 5 years and he decides to use the prime cost method to calculate the decline in value. His electricity bill at home is $3,700  during the income year 2020 and he estimated 40% of the electricity bill is a work-related expense when he worked from home. He has no other deductions except for those mentioned above.

(b)Keri sold an investment property located in Sydney on 15 May 2020. The property was leased for the entire time that Keri owned it. The acquisition and the sale of the property are as follows:
Purchase on 10 June 2012
Purchase price: $ 550,000
Stamp duty: $ 23,800
Legal costs: $ 3,700
Property Renovation: 78,800
Fines $19,000 from the local Council for erecting an illegal swimming pool in the backyard
Legal costs $78,000 to resolve disputes with neighbors regarding the driveway of the properties. Keri was awarded a legal cost of $45,000 against her neighbor.
Interest payments to Commonwealth Bank $248,000
Sales on 15 June 2020 for $ 1,570,000.

You must give reasons for your answer. Your discussion must include an analysis of the pertinent sections of the relevant legislation, rulings, and the relevant case law. If relevant, you must show your calculation. You must apply the law to the facts given in this question and provide YOUR OWN analysis of the issues. Calculations must be included where relevant.

QUESTION 2 
One of Suman’s customers bought some computer equipment for $16,000 on credit on 21 June 2019 but could not pay the account, which was issued on the same day. The customer went bankrupt in November 2019.  Suman wrote off the debt on 1 July 2020.
In May 2019, Suman decided to take a night off and go to Star City Casino. It was his lucky night. He won $4,250,000 playing the card game “blackJack”.  His friends told him it was “beginner's luck”.
In July 2019, Suman decided to use the winning money from the casino to purchase a truck for $125,000 and used it as a delivery vehicle for his business. Suman often delivered computer equipment to his customer directly from his suppliers and the toll fares that he incurred for these delivery trips were $2,658 for the 2020 financial year. He had to lodge a tax return for the year ended 30 June 2020 and seek your advice on whether he would be able to claim any deduction (including the truck if any) for his business.
In October 2019, Suman also invested the winning money towards an investment property in Sydney for $2.5million. He decided to sell the properties a few months later in August 2020 for $3 million because of the attractive gain. The net proceeds from the sale (after all relevant costs/expenses) is $228,000. 

Explain how you would account for these events from the perspective of the Income Tax return for the year ending 30 June 2020. Determine Suman’s taxable income for 2020

You must give reasons for your answer. Your discussion must include an analysis of the pertinent sections of the relevant legislation, rulings, and the relevant case law. If relevant, you must show your calculation. You must apply the law to the facts given in this question and provide YOUR OWN analysis of the issues. Calculations must be included where relevant.

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