HA3042 - Taxation Law - Identify the Sources of Taxation Law - Taxation Law Assignment Help

Assignment Task

Purpose of the assessment (with ULO Mapping)

Students are required to follow the instructions provided by the Unit Co-ordinator to confirm any relevant information. You also need to refer to the relevant announcement(s) on Blackboard to confirm the due date and the time of the assignment. The individual assignment will assess students on the following learning outcomes, as listed below:
1. Identify the sources of taxation law and the framework in which taxation is administered (ULO 1)
2. Identify various types of taxation including income tax, consumption taxes, goods and services tax, taxes on capital and fringe benefits tax (ULO2)
3. Identify and apply the fundamentals of calculating the taxable income and tax payable for individuals and business entities (ULO 3)
5. Communicate knowledge of taxation law, through written and/or Oral communication, and be able to demonstrate critical thinking and legal analytical skills. (ULO 5)

Purpose:
This individual assignment aims to assess students on learning outcomes 1, 2, 3 and 5 as mentioned above. This assignment covers the following key topics: Specific Deductions, Individual Income Tax and Fringe Benefits Tax (FBT).

Questions
QUESTION 1
Sita, your client, has provided you with a listing of the transactions she has undertaken throughout the financial year to assist you in completing her 2020 Income Tax return.
• There was a sale of a block of land for $1,000,000. She purchased the land as an investment in 1991. The purchase price was $250,000 plus $5,000 in stamp duty and $10,000 in legal fees. To fund the purchase, she took out a loan on which she paid interest totalling $32,000.
• During the period of ownership, her council rates, water rates and insurance totalled $22,000.
• In January, 2005 a dispute occurred with a neighbour over the use of the land and legal fees incurred amounted to $5,000 in resolving this dispute.
• Before putting the property on the market, $27,500 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.
• Sita sold her 1,000 shares in Rio Tinto for $50.85 per share. She paid brokerage of 2% on the sale. She initially purchased the shares for $3.50 per share in 1982.
• Sita sold a stamp collection she had purchased, from a private collector, in January 2020 for $60,000. She sold the collection at auction for $50,000. Auction fees totalled $5,000 for the sale.
• Sale of a grand piano for $30,000.It was initially bought for $80,000 in 2000.

Required:
Based on the information above, advise your client of the capital gains tax consequences for each of the transactions stated above. Ignore indexation. Your answer must include references to the relevant tax law and/or cases.
a) Determine Sita’s capital gain or loss for the sale of land.
b) Determine Sita’s capital gain or loss for the sale of shares.
c) Determine Sita’s capital gain or loss for the sale of grand piano 
d) Determine Sita’s Net capital gain or Loss for the 2020 Income Tax return

QUESTION 2
Sharma has an advertising business and uses a low value asset pool in calculating his depreciation deductions. The closing balance in his low-value pool as at 30 June, 2019 was $19,000. His Capital purchases during the year were a printer costing $650 and a computer costing $950. Both the printer and the computer were used 50% of the time in the business and 50% of the time for private use. Sharma also purchase a special desk (furniture) on 1st July, 2019 that was designed specially to draw for the amount of $2,000 that has a useful life of 5 years. Sharma decided to use the prime cost method to depreciate the desk. (Note - Your answer must include references to the relevant tax law and/or cases.)

Required:
a) Based on your knowledge of Capital Allowances and the low value asset pool, calculate Sharma’s depreciation deduction for the year.

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