Bachelor of Business
BA 215.
Taxation Law
Individual Assessment
TRIMESTER 2, 2020
Day/date: Tuesday, 1 September 2020
Time: 5:00 pm
Duration N/A
Total Marks: 10 marks
Word Limit: 2,000
Weight: 10%
Unit Coordinator Ms. Irene Collins
Moderator Dr Tushar Das
No. of pages 03 pages (including this cover page)
Unit learning outcomes assessed:
1. Understanding the taxation law for Individuals and businesses.
2. Explain income tax law in Australia.
3. Explain and solve taxation law problems.
Instructions to Candidates
1. This is an individual assessment.
2. Please complete all questions.
3. Please submit it to Moodle using the Turnitin submission link.
Student ID: ……………………………………………………………………………….
Name: ________ _______________________________________
Assessment Task Description
You are required to complete the following assessments
PART A (10 Marks)
Advice Jordan the assessability and deductibility of the below transactions. Show calculations and support your advice by reference to relevant tax legislation and tax cases.
Advice Jordan on the tax implications regarding the deductibility, FBT and GST associated with the $2,000 gym membership. Show calculations and support your advice by reference to relevant tax legislation and tax cases.
Jordan does not operate a business, but has shares in Australian listed companies and owns one rental property at Coogee. Jordan is a full-time employee of Bendigo Bank and works as an assistant manager at the Sydney office on a salary of $75,000 per year.
Question 1 (2 Marks)
Jordan is interested in purchasing investment properties in regional Melbourne, in Bendigo because of the better value for money for properties compared to Central Melbourne or Sydney. After being introduced to a real estate agent in Bendigo, Jordan flies to Melbourne early on Saturday and returns back to Sydney on Monday morning. The real estate agent picks Jordan up from the airport and drives to Bendigo. The agent pays for the hotel accommodation and drives Jordan around the properties. Jordan incurs $700 in airfares from Sydney to Melbourne and incurs a $120 taxi fare from the airport to Bondi. Jordan decides to purchase one of the properties the real estate showed him for $450,000. The purchase was settled on the 20 December 2019 and the exchange of contracts was on the 11 November 2019 and has begun receiving rent from tenants from the 21 December 2019. The interest on the loan was $15,000 for the 2019-2020 income year. The rent received from renting the property was $30,000 for the 2019-2020 income year.
Question 2 (2 Marks).
Jordan arranges for a concrete ramp to be placed at the back of the Coogee property as his elderly relatives s requested to have it as the stairs are steep and dangerous, going from the house to the backyard. The cost of installing the concrete ramp at the property was $4,000 and the contractors started work on the 21 August 2017 and the ramp was completed on the 30 August 2017. Jordan and his relatives were very happy with the concrete. Jordan purchased the property back in December 2017 for $350,000.
Question 3 (2 Marks).
Jordan decides to sell the Coogee property because the elderly relatives would have to go to a nursing home as they are elderly, his uncle is 96 and his auntie is 95. Jordan advertises the property for sale and sales it shortly after to an investor for $400,000. Exchange of contracts take place on the 25 May 2019 and settlement occurs on the 15 August 2019, due to the sickness of his solicitor. The real estate agent’s commission on the sale was $6,000 and the solicitor’s fees for the sale were $4,500.
Question 4 (2Marks).
All staff at Bendigo Bank at assistant manager level and above, are entitled to receive one year of a gym membership on top of the normal salary. The value is not to exceed $2,000 and Jordan has decided to have the annual gym membership paid for and join “Fitness A” gym and attend classes 3-4 times per week. Bendigo Bank paid for the gym membership on the 1 March 2019 the amount of $1,800. Bendigo Bank and Fitness A are registered for GST.
Q5 (2 Marks).
Jordan decides to open a restaurant in the main street of Coogee Beach as it is busy with young tourists. The restaurant opened on 15 December 2019 and will be managed by his friend John as Jordan has a full time job. Jordan is planning to manage the restaurant on the weekends. The premises are leased, and the rent is $1,000 per week.
End of Document
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