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TAXATION LAW 4 Taxation Law Name of the University Author

   

Added on  2020-03-28

13 Pages1825 Words447 Views
Running head: TAXATION LAWTaxation LawName of the StudentName of the UniversityAuthors NoteCourse ID
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1TAXATION LAWTable of ContentsAnswer to Question 1.1:.............................................................................................................3Issue:..........................................................................................................................................3Rule:...........................................................................................................................................3Application:................................................................................................................................3Conclusion:................................................................................................................................3Answer to question 1.2:..............................................................................................................4Issue:..........................................................................................................................................4Rule:...........................................................................................................................................4Application:................................................................................................................................4Answer to question 1.3:..............................................................................................................4Issue:..........................................................................................................................................4Rule:...........................................................................................................................................5Application:................................................................................................................................5Answer to question 1.4:..............................................................................................................6Issue:..........................................................................................................................................6Rule:...........................................................................................................................................6Applications:..............................................................................................................................6Conclusion:................................................................................................................................6Answer to question 2:.................................................................................................................7Issue:..........................................................................................................................................7
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2TAXATION LAWRule:...........................................................................................................................................7Applications:..............................................................................................................................7Conclusion:................................................................................................................................8Answer to question 3:.................................................................................................................8Answer to question 4:...............................................................................................................10References................................................................................................................................12
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3TAXATION LAWAnswer to Question 1.1:Issue:Based on the given case the issue has been found in terms of whether allowabledeductions needs to be charged on moving the machine to a new location.Rule:I.“Section 8-1 of the ITAA 1997”II.“British Insulated & Helsby Cables”III.“Taxation ruling of TD 92/126”Application:The taxpayer needs to be entitled for the various types of allowable deductions whichhave taken place as per the income accessible. Based on “Section 8-1 of the ITAA”, theactivity of moving the machine has been identified as an inflated cost of asset. Based on thepresent condition it has been seen that the cost of moving the machine shall not be consideredunder permissible deductions. The main rationale for it is due to increased asset cost.As stated in “British Insulated & Helsby Cables”, the cost of transport lay down atseven evidence by showing consistent advantage for the business enterprises in relocating thedepreciable asset/machinery in a new place. As per “Taxation ruling of TD 92/126” the costincurred at the outset of setting new machinery is considered as the revenue for the businessas this cost is generally considered under cost of capital and cannot be entitled for allowabledeductions (Pyrmont 2014).Conclusion:Henceforth, it can be discerned that the cost incurred in moving the machinery is notentitled under allowable deduction as this kind of cost is considered under cost of capital.
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