Subject Code : HA3042
Assignment Task

HA3042: Taxation Law Individual Assignment

Learning Outcomes:
Students are required to follow the instructions by your lecturer to confirm any relevant information. You also need to follow any relevant announcement on Blackboard to confirm the due date and time of the assignment. The individual assignment will assess students in the following learning outcomes:
1. Knowledge of tax law concepts
2. Ability to analyze tax law issues
3. Ability to apply legal tax principles

 

Task: This assignment aims at assessing students on the Learning Outcome from 1 to 3 as mentioned above.
Question 1:
On 1 April, Spiceco Pty Ltd provided a car to their employee Lucinda for her private use. Throughout the FBT, the cost of the car was $18,000, repairs $3,300 Insurance $2,200, Fuel $ 990 (all above expenses are GST inclusive). Distance traveled 20,000 km (for the entire FBT year), Business use 70% Lucinda contributed $1,000 towards the cost of the car. Using the rates, calculate the FBT liability for Spiceco Pty Ltd for the FBT year, assuming Spiceco Pty Ltd would like to minimize its FBT liability. If there is more than one method of calculating the FBT liability, conclude which method should be used. Show full workings to support your conclusion.


Question 2:
Daniel Ray is in his late 50s and would like to plan for his retirement. Daniel has visited his accountant last week (15th March). As part of his plan, he likes to contribute to his superannuation fund (i.e. BT Super for Life) before the end of the financial year this year. (i.e. 30 June). Daniel has different assets worth around $1m and plans to see these and contribute this to his super fund. He also wants to lease his house and withdrew tax-free amounts from the huis super account when he turns sixty in August. As part of his plan to collect $1m for his super investment, he has sold the following assets:

1- A house located at Doncaster (a suburb of Melbourne). Daniel lived in this property for the last 30 years. At that time, he bought the house for $70,000 and sold the house for $865,000 in an auction on Saturday 29th June. Out of this, he paid $15,000 to the real estate agent for the sales commission. The buyer deposited $85,000 on the property, however after 14 days, the buyer advised the real estate that he did not have enough money for proceeding with the contract of [purchase, therefore forfeiting his deposit to Daniel on 1st May. After this, the real estate agent started looking for another potential buyer.

2- Daniel has an artistic piece of a painting by Margaret Preston. He purchased this on 20 September 1985 for $15,000. The painting was sold for $125,000 at an auction .

3- Daniel had a luxury yacht that he has since he was an active member of the Port Melbourne Yacht Club. He purchased the yacht in November 2004 for $110,000. Daniel sold the luxury yacht on 1st June for $60,000.

4- Daniel had shares in BHP mining company, which he has purchased these shares on 10 January for $75,000 and sold all of these shares on 5 June for $80,000. Indeed, he got a loan of $70,000 in order to buy these shares and incurred a $5,000 interest on the loan. Daniel has paid $250 for stamp duty on the purchase, and $750 of brokerage fee on the sale of these shares. Daniel spoke to his tax adviser and he has advised Daniel that $5,000 interest incurred on the loan is a nondeductible
expense. In his previous financial year’s tax return Daniel has incurred a net capital loss of $10,000 from the sale of AZJ shares. AZJ shares were the only asset that he sold in the financial year.

(a) Based on the above information, you are required to determine Daniel Ray’s net capital gain or net capital loss for the year ended 30 June.
(b) What Daniel will do with a likely net capital gain in this financial year.
(c) What Daniel will do with a likely net capital loss in this financial year.

 

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  • Posted on : December 07th, 2018

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