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Taxation Law in Telstra Shares

   

Added on  2020-05-28

6 Pages1152 Words86 Views
Running head: TAXATION LAWTaxation LawName of the StudentName of the UniversityAuthors NoteCourse ID
Taxation Law in Telstra Shares_1
TAXATION LAW1Letter of AdviceTo: Brad SmithFrom: Tax Accountant Subject: Tax Return 2017/18Dear BradI would like to draw your kind attention towards the taxable information provided byyou has been acknowledged and based on this information we are providing you withappropriate tax information from the transactions reported by you. As evident from your noteit is noted that you have reported gross salary of $99,920 and out of which $26,734 has beenwithheld. According to the “section 6-5 of the ITAA 1997” your gross salary would beconsidered to be assessable and would be included in your taxable return (Barkoczy 2016).Additionally, it is found that you have undertook loan of $100,000 at the annual interest rateof 2%. Therefore, the interest charged on the loan taken for purchasing the investmentproperty can be claimed by you for as the assessable income under “section 8-1 of the ITAA1997”. You have reported that you incurred expenses on petrol and the expenses incurred byyou have been incurred for work purpose and the same can be claimed as deductions under“FBTAA 1986” (Tan et al. 2016). According to the “Taxation ruling of TR 97/23” an individual can claim deductionsfor the expenses incurred on repairs. The ruling effectively provides the circumstances underwhich the expenditure incurred by the taxpayer for repairs would be considered as theallowable deductions under “section 25-10 of the ITAA 1997” (Snape and De Souza 2016).As evident from the information provided it was found that you incurred expenses for repairson the investment property. In context of the “section 25-10” the expense of $30,000
Taxation Law in Telstra Shares_2
TAXATION LAW2reported by you satisfies the term “repairs” since it is related to the work done by you on thepremises. The work has been done you is in conjunction with the objective of remedying ormaking the defects goods and preventing the property from being deteriorated. On the otherhand, it was noted that you bought air condition system which is not related to any repairsand hence the expenses incurred on air conditions would not be allowed as allowabledeductions under “section 25-10 of the ITAA 1997” (Saad 2014). In the later part it has been noted that you sold shares of Telstra that was bought byyou and in respect of the Australian taxation office gains made from the sale of shares giverise to CGT events (Miller and Oats 2016). Similarly, it was noticed that you incurred a lossfrom the sale of shares that held in Orica and the same can be set off against the gains madefrom the sale of Telstra shares. As evident from the information the loss on sale of sharesfrom Circa can be offset from the gains made on sale of Telstra Shares. The information provided by you also contained transaction on the sale of RussianBabushka dolls. The doll was purchased by you for $1,000 and the same was sold for $4900.As a result of this you made a capital gains and the same would be included in yourassessable income which would subjected to 50% CGT discount for the amount reported byyou. According to “section 8-1 of the ITAA 1997” it provides that any form of loss or outgoingsreported by the taxpayer would be considered as allowable deductions given that legalexpenses has been incurred in generating the assessable income of the taxpayer (Bevacqua2015). A deduction would not be available if the expenses incurred are of capital, private orof domestic nature. The legal expenses that is incurred by you on neighbours for illegal fencewould not be considered for allowable deductions since these expenses carries the nature ofprivate or domestic expenses.
Taxation Law in Telstra Shares_3

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