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Taxation laws : Sample Assignment

   

Added on  2021-05-31

9 Pages1659 Words21 Views
Running head: TAXATION LAWTaxation LawName of the StudentName of the UniversityAuthors NoteCourse ID

TAXATION LAW1Table of ContentsAnswer to question A:................................................................................................................2Answer to question B:................................................................................................................4Reference List:...........................................................................................................................8

TAXATION LAW2Answer to question A: “Section 6 of the ITAA 1936” provides that income derived from the personal sourcesincludes income from personal exertion. This comprises of the salaries, fees, bonus,allowances or proceeds from business carried on by the taxpayer (Barkoczy 2014). Evident inthe situation of Emily the gross pay would be included in the assessable income for thepurpose of assessment. A person is allowed to claim deductions relating to the borrowingexpenditure that is occurred in purchasing the investment property. This comprises of theinterest expenses on borrowing where a person can claim deductions for the same under“section 8-1 of the ITAA 1997”. The loan interest incurred by Emily to purchase the investment property is held as theallowable deductions under “section 8-1 of the ITAA 1997” (Brokelind 2014). However,Emily shall only be allowed to claim deductions relating to the $400,000 only as the samewas used in purchasing the investment property. While the remaining sum of $200,000 andthe interest incurred for the same will not be allowed for deductions. This because theexpenditure constitutes private expenses under “section 8-1 (2) (b) of the ITAA 1997” sincethe expense forms the part of the negative limbs (Coleman and Sadiq 2013). According to the Australian taxation office an individual is allowed to claimdeductions relating to the capital works. Evidently in the situation of Emily the purchase ofnew Air conditions relating to the rental property qualifies as the capital works and the sameis allowable for deductions. According to “section 25-10 of the ITAA 1997”, a person isallowed to claim for deductions relating to the repairs of the premises (Eliot 2016). Yet, aperson is not allowed for deductions relating to the repairs which comprises of significantcapital improvement or cost incurred for replacing a significant part of the property. Theseexpenditures are held as capital in nature and are non-allowable deductions.

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