On 10 July 2014, Jim Morris was Transferred to to the Tokyo office of his company, Worldwide">

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Taxation Tax (Australia) Case Study 1 "Income" On 10 July 2014,-(Answered)

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Taxation Tax (Australia)

Case Study 1

"Income"

On 10 July 2014, Jim Morris was Transferred to to the Tokyo office of his company, Worldwide Austrlia Ltd, for five years. His wife Mandy accompaniec him to Tokyo. In Tokyo they lived in an apartment owned by the company and leased their Melbourne residence. While residing in Tokyo Mandy borroed $100,000 from Westpac Bank on December 2014, to fund the purchase of $50,000 shares in Worldwide Australia.

During the 2014/2015 tax year Many received $10,000 as her share rental income from lease of their Australian home, and $2,500 in fully franked (taxed) distributions from Worldwide Australia. She incurred no expense in deriving the rental income, but her interest payments on the Westpac bank loan ammounted to $5,550.

What are Australian tax consequences of these transactions for Mandy Morris? Explain and Justify your answer relevant case laws. Detail discussion is required.


Case Study 2

"Genral Deductions"

Super-Fast Transport Ltd. incurred expenses of $5,000 in arranging a loan to finance its working capital requirements and an expansion of its debtors. The loan is $1,000,000 was for four years and was entered into 1 April 2015.

Advise Super-Fast Transport Ltd. whether it could claim any of the loan expenses as a tax deduction for the 2014/2015 tax years?

Use relevant laws and sections to justify your answer. Detail discussion is required.


(Case Study 3)

Capital Gain Test

On 2 November 1988, Bob Morgan purchased two hectares of land for $280.000 in Yarra Valley. On 20 March 2015, he sold one hectare of land for $220,000 (The reamaining land was of equal value)

The leagal and other costs associated with the acquisition of the two hectares land were $12,000 and with the disposal of one hectare $2,000.

You are to consider the CGT amplications both from the relevant sections (ITAA), rulings, etc. and from the values (if/where applicable). Calculate the Capital gain for Bob arising from sale of the land for the year 2014/2015 tax year.

Detail discussion is required.

 

Paper#9209619 | Written in 27-Jul-2016

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