Taxation Law: Repairs, Legal Outgoings, Capital Gains Tax and Personal Use Assets

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID

1TAXATION LAW
Table of Contents
Answer to question 1:.................................................................................................................2
Answer to A:..........................................................................................................................2
Answer to B:..........................................................................................................................2
Answer to C:..........................................................................................................................3
Answer to question 2:.................................................................................................................4
Answer to A:..........................................................................................................................4
Answer to B:..........................................................................................................................5
Answer to C:..........................................................................................................................5
References..................................................................................................................................8

2TAXATION LAW
Answer to question 1:
Answer to A:
The “taxation ruling of TR 97/23” clarifies the conditions where the outgoings
associated to repairs is treated as the permissible deductions under “section 25-10 of the
ITAA 1997”. In context of “section 25-10” repairs are denoted as work performed on the
premises to remedy the defects, damage or deterioration that contemplates the continuous
presence of property (Barkoczy, 2014). Repairs for majority of part is partial or occasional.
Works can be fairly termed as repair if it carried out to make the deterioration good arisen by
wear and tear, by accidental or deliberate damage or due to the natural causes. The judicial
decision made in “BP Oil Refinary Ltd v FC of T (1992)” stated that the work would not be
treated as repair until it comprises restoration of something that is damaged or lost whether
function or substances or certain other characteristics or quality (Grange et al., 2014).
Ruby Engineering Pty Ltd held the rental property since 2008. The company replaced
the kitchen fittings and cupboard that was deteriorated by wear and tear. The company
replaced the cupboard with the similar type without causing any substantial change. In
context of the “section 25-10 of the ITAA 1997”, the repairs expense of $8,500 performed by
company on the kitchen will quality for deduction since the work was performed to remedy
the defects caused by wear and tear in order to contemplate the continuous presence of
property (James, 2015). The works can be fairly termed as repair which was carried out to
make the deterioration good arisen by wear and tear.
Answer to B:
As per “section 8-1 of the ITAA 1997” the taxpayer is permitted to obtain the
deduction for the legal outgoings that is occurred in defending the damages claims in context
of the injuries that is allegedly sustained by the person who was visiting the tenant at the