Assignment:

Part A: Describe why the payment to the taxpayer in FCT v Dixon (1952) 86 CLR 540 was assessable income however the payment in Scott v FCT (1966) 117 CLR 514 was not.

In your answer you must comprise (but not essentially be limited to) the following:

a) A brief statement in your own words of the facts of the cases.
b) Recognize the issues raised and the relevant legislation in the context of ITAA97.
c) Identify any cases and other sources of information relevant to the issues and legislation.
d) Apply the law to the facts stating evidently why one taxpayer was assessable and the other was not.

Part B: Nigel is a professional percussionist and performs with a number of bands and orchestras. In order to practice, he set aside a special room in his house which is sound-proof and consists of a variety of electronic sound equipment. The room is only used for practice or performance related purposes. He pays council rates, interest on the house mortgage, repairs and maintenance, electricity and telephone expenses in connection with the house. He believes he should be capable to claim tax deductions for all such costs together with depreciation on the room and equipment.

Elucidate the tax position to Nigel. In you answer you should:

a) Identify the tax issues that are raised and the relevant sections of the legislation.
b) Identify any cases and other sources of law or information that apply.
c) Apply the law to the facts.
d) Express a conclusion in regard to the issues identified and point out any other information required.