Taxation - Law and Practice
Assessment: Case Study Report
ADMINISTRATIVE DETAILS
Goal: To apply taxation knowledge to the provided scenarios enabling completion of the required calculations.
Product: Individual Case Study containing two completed calculations, with assumptions and references.
Criteria: Accurate interpretation, application and referencing of Taxation Laws to the facts presented.
Apply ethics and professional acumen.
Demonstration of thorough research.
2 TECHNICAL DETAILS
1. Satisfactory completion requires:
- The requested outputs
- Worksheet containing assumptions, explanations and calculations
- Relevant legislation and / or case law and / or rulings
3 PRACTICAL DETAILS
Question 1:
Jane Brown (aged 30).
Jane is an eligible beneficiary of the Brown Family Discretionary Trust. The trustees decided to distribute a cash amount of $20,000 to Jane for the current tax year.
Jane also receives $20,000 fully franked dividends.Jane has a $20,000 HELP debt.
Jane received $79,000 (gross income) from employment at Company Pty Ltd for the period 1 July 2016 to 30 June 2017. The correct amount of PAYG has been withheld.
Jane reports interest income of $475.
Jane advises of investment expenses of $250.
Jane receives rental income of $35,000 from an investment property. The associated expenses are:
- Mortgage repayments: $25,000
- Repairs: $2,000
- Rates: $2,500
- Insurance: $500
Jane sold a parcel of 200 Coles Myer Group shares on 1 July 2016 for $3,500. She had purchased these shares on 1 July 2009 for $800. Her brokerage costs of buying and selling were $300 in total.
Jane made donations (for which she presents tax invoices and receipts) to the value of $900.
Jane does not wear a uniform to work.
Jane pays premiums on an income protection insurance policy equivalent to $1,000 per year.
Jane does not have Private Health Insurance.
Required:
Task 1 Calculate the net tax payable/ refundable situation for Jane for the current tax year (include references, calculations & assumptions)
Question 2
Green Pty Ltd is a resident gardening company registered with the following information:
TFN: 859 376 213
ABN: 79 512 647 864
ACN: 86 572 314 719
The following is thefinancial information for the year ended 30 June 2017.
GST (where it is applicable) has not been removed from the following amounts.
Depreciation (for tax purposes) was reported to be $5,500 for the current year.
Income:
|
Sales
|
345,000
|
|
Exempt income
|
10,000
|
|
Dividends (fully franked)
|
10,260
|
|
Interest received
|
900
|
|
Compensation from a client who failed in a legal suit to obtain damages from Green Pty td for alleged property damage.
|
4,000
|
|
Net capital gain
|
4,000
|
Expenses:
|
Advertising (print, net, signage, flyers)
|
1,000
|
|
Bad debts
|
900
|
|
Bank Charges
|
150
|
|
Capital expenditure (qualifies for immediate deduction)
|
3,000
|
|
Cost of sales
|
60,000
|
|
Sub-contractor expenses
|
23,000
|
|
Depreciation expenses
|
2,000
|
|
Electricity
|
800
|
|
Entertainment
|
2,000
|
|
Environmental protection (disposal of chemicals)
|
600
|
|
Fines (speeding and parking tickets)
|
500
|
|
Insurance
|
600
|
|
Interest expenses within Australia
|
1,200
|
|
Lease expenses within Australia
|
4,000
|
|
Motor Vehicle 3rd Party insurance
|
550
|
|
Motor Vehicle expenses (petrol & maintenance)
|
4,000
|
|
Motor Vehicle Registration
|
1,200
|
|
Rent expenses
|
11,800
|
|
Stationery & Office supplies
|
200
|
|
Tea, coffee, sugar & milk for staff use
|
100
|
|
Telstra (Phones & Internet)
|
2,000
|
|
Wages
|
45,000
|
Required:
Task 1 Calculate the net tax payable/ refundable situation for Green Pty Ltd (include references, calculations & assumptions)