Taxation | Assignment | New

Running head: TAXATION
Taxation
Name of the Student
Name of the University
Author Note

TAXATION1
1)
Issue
Which of the income are required to be included within the tax return pertaining to Anna for the
year ending on 30th June 2019. Whether any of the expenses incurred by Anna is allowable as deduction
in the same year.
Rule
Any receipt received by a taxpayer, which can be treated as an income even in the absence of any
statutory provision recognising the same as income would be rendered as ordinary income as provided in
ITAA97, s 6-5.
As per the legal principles enumerated in the decision of Dean & Anor v FC of T 97 ATC 4762,
income accrued from personal exertion would be required to be treated as an ordinary income and any e
receipt incurred as a remuneration for employment would be included in the same.
PAYG withheld are required to be adjusted with the net tax liability and needs to be treated as a
credit for the taxpayer as provided in ITAA97, s 18-15.
Interest from bank is required to be treated as and ordinary income as for the legal principle
enumerated in Riches v Westminster Bank Ltd [1947] AC 390.
Amount received by way of dividend is required to be included in the taxable income in case of
resident individuals as provided in ITAA36, s 44.
Income from exploitation of land is required to be treated as an ordinary taxable income as per
the legal rule established in the case of Adelaide Fruit and Produce Exchange Co Ltd v DFC of T (1932)
2 ATD 1.

TAXATION2
Expense that are accrued to a person by virtue of his income earning process or is a consequence
of the same would be allowed as a deduction as per ITAA97, s 8.1
Any expense that has been incurred for a public or private purpose would not be allowed as a
deduction. This can be supported with the case of Lodge v Federal Commissioner of Taxation [1972]
HCA 49.
Travelling from work to other place relating to work is required to be treated as an deductible
expense as per the case of Taylor v Provan [1975] AC 194. Travel from home to work is not deductible in
its general senses, but the same is to be treated as deductible in special circumstances where there is an
on-call duty as per the case of FC of T v Collings 76 ATC 4254.
Expense for a suit or any other items of conventional nature are not to be included allowed as a
deduction under ITAA97, s 8.1. This can further be supported with the case of Mansfield v FC of T 96
ATC 4001.
Depreciation of an asset using the Prime Cost Method = Cost x (Days held / 365) x (100% /
Effective life in years)
Expenses incurred for home office will not be allowed as a deduction under ITAA97, s 8.1 as can
be supported by the case of Handley v FC of T 81 ATC 4165.
Application
Receipts
Wages (income from personal exertion, ordinary income). $160,000
As any receipt received by a taxpayer, which can be treated as an income even in the absence of
any statutory provision recognising the same as income would be rendered as ordinary income as
provided in ITAA97, s 6-5. As per the legal principles enumerated in the decision of Dean & Anor v FC