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Microsoft Word - Tax 305 Semester 2 2020 ASSIGNMENT College of Business and Law TAX 305 TAXATION LAW ASSIGNMENT 1 - WRITTEN ASSIGNMENT VALUE: 30% OR 30 MARKS WORD COUNT: 1,500 - 2,500. THIS INCLUDES ALL FOOTNOTES AND REFERENCES. (10% margin under or over) This assignment may be submitted on or before 11.59pm (ACST), Study Week 8 18th September 2020 Submit your Assignment using Word or PDF file format The assignment must be lodged online via Learnline Assignment Lodgement link. Assignment lodgements will be acknowledged automatically on the Learnline site, on submission. Citations: The CDU Harvard or AGLC referencing styles may be used, as long as you choose one style and use it consistently. Additional research IS required for this assignment. Further questions: Post your questions on the discussion board. College of Business and Law UNIVERSITY PLAGIARISM POLICY Plagiarism is the unacknowledged use of material written or produced by others or a rework of your own material. All sources of information and ideas used in assignments must be referenced. This applies whether the information is from a book, journal article, the internet, or a previous essay you wrote or the assignment of a friend. Plagiarism policy is available at:http://www.cdu.edu.au/governance/doclibrary/pol-001.pdf and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/doclibrary/pro-092.pdf. EXTENSIONS AND LATE LODGEMENTS Extensions An Application for Assignment Extension or Special Consideration should be completed and provided to the Dean, College of Business and Law. This application form, explanation and instructions is available on the Learnline course site or direct from http://learnline.cdu.edu.au/units/lb_school_templates/deployed/assignment_extension.docx Please note that it is now College policy that all extension requests must be approved by the Dean. The lecturer is not able to personally approve extension requests. Leaving a request for an extension, special assessment or special consideration until the last moment, based on grounds that students could have reasonably been able to foresee, may result in the application being rejected. Late lodgement Late lodgements are subject to a penalty of 5% of assignment marks per day. Partially completed assignments will be accepted with appropriate loss of marks for the incomplete portion. College of Business and Law Case Study One - Part A You are currently working as a graduate accountant and are provided with the following information from a client. The client, Joe, has the following income and expenses for the financial year ended 30 June 2019. Joe is employed as a manager of operations at a local transport company. In addition to his employment Joe also operates a market stall selling wood carvings on the weekend. Income $ • 45,000 Sales of wood carvings from the market stall • 1,000 An anniversary gift from his employer for Joe’s 10th wedding anniversary • 5,000 Bonus received from his employer for successful completion of large project • 125,000 Salary received from his employer (including PAYG Withholding of $22,000) • 5,000 Interest on Bank Deposits • 10,000 Joe gambles on the horses and during the year had won $10,000 on betting • 35,000 Sale of his personal motor vehicle (he brought the vehicle for $15,000) • 25,000 Sale of shares (he brought the shares 13 months ago for $10,000) • 1,000 Received Manager of the year award from the Institute of Managers Expenses $ • 2,000 Rent on market stall for his business • 5,000 Purchase of wood for carvings, Joe estimates in cost he has $2,000 in wood as at 30 June 2019 as stock on hand and advises that as at 1 July 2018 his wood stock at cost was $3,000. • 800 Joe purchased steel capped work boots for $500, protective sunglasses for $220, New jeans for $80 (which he also wears on the weekend) • 1,500 Bookkeeping fees for the market stall business • 12,000 Purchase of new carving tools for the market stall business • 400 Cost of meals and entertainment that his employer did not reimburse • 200 Train fares for travel to and from work • 3,200 Rates on family home • 900 Electricity for family home • 1,000 Advertising packaging for market stall business • 1,000 Purchase new table and counter for market stall Joe does not have any children. Joe does have private health insurance. Joe also advises you that he had carried forward tax losses from last year of $2,000 relating to his market stall. In addition to the above Joe advises he does work from home as he attends to emails late night after dinner at least 4 nights a week. College of Business and Law Required: • Determine which Income and Expenses are assessable income or allowable deductions. Note you will need to cite legislative references, case law and tax rulings as applicable. Emphasis is on providing substantiation for you reasoning to include as assessable income or allowable deduction. Also refer to the relevant item number on the 2019 tax return where the amount would be disclosed, i.e. (interest income is item 10). An Example format is provided below. • Assume Joe is a resident for Australian taxation purposes, calculate his tax liability including any tax offsets and levies. EXAMPLE FORMAT Income Assessable Particulars Legislation, Case law, Rulings, Reasoning Item – 2019 Tax Return Y/N Expenses Deductible Particulars Legislation, Case law, Rulings, Reasoning Item – 2019 Tax Return Y/N Part B During your meeting with Joe, he advises that his employer has offered him a position for 3 years in Thailand. Joe seeks your advice on residence issues for Australian taxations purposes. In particular Joe wants to understand impact on any Non Australian assets he owns (Joe currently has overseas shares valued at $150,000 and a overseas property in Singapore valued at $1.5million). Joe also wants to understand what tests will be applied to determine his residency. (Part A 20 marks) (Part B 5 marks) Word Count: 1,000 - 2000 words College of Business and Law Theory Question Required: Discuss the difference between tax evasion and tax minimization. Consider when will the tax office deny a deduction based on a taxpayer’s subjective purpose or intention in incurring the expenses. (5 marks) Word Count: 500 words