Taxation Law and Practice
Assessment 2: Case Study Report (40%)
• 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.
Weighting: 40%
Due date: Week 11 – Monday 12am AEST
Submission: Safe Assign (Excel)
Late penalties: 5% (of the assessment task’s identified value) per day for the first two days from the date identified as the due date for the assessment task.
10% (of the assessment task’s identified value) for the third day.
20% (of the assessment task’s identified value) for the fourth day and subsequent days up to and including seven days from the date identified as the due date for the assessment task.
A result of zero is awarded for an assessment task submitted after seven days from the date identified as the due date for the assessment task.
Weekdays and weekends are included in the calculation of days late. To request an extension, you must contact your course coordinator to negotiate an outcome.
• Technical Details
• Satisfactory completion requires:
• The requested outputs
• Worksheet containing assumptions, explanations and calculations
• Relevant legislation and / or case law and / or rulings
• Practical Details
Question 1 (20 marks):
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 # Task Description Marks
1 Calculate the net tax payable/ refundable situation for Jane for the current tax year (include references, calculations & assumptions) 20
Question 2 (20 marks):
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 the financial 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 # Task Description Marks
1 Calculate the net tax payable/ refundable situation for Green Pty Ltd (include references, calculations & assumptions) 20