Aus Tax Law

Geoffrey is a doctor specializing in forensic evidence and is registered for GST. He has an office in central Sydney. In his office there is a large oak desk which he purchased for $1,000from his neighbor at a garage sale. A computer terminal is situated on the desk which he acquired for $4,400 (inclusive of GST). There are also several bookshelves in his office which cost Geoffrey $3,300 (inclusive of GST). Placed on the bookshelves are several volumes of various medical reports which cost him $44,000 (inclusive of GST). Geoffrey also invented a revolutionary chair for those who sit for extended periods at very large desks and the chairs are sold by him from the Sydney office through his retail business Geoffrey's Revolutionary Chair Company Pty Ltd. In the preceding income year, the retail business had an opening stock valued at $2 million and it purchased the chairs for $11 million (inclusive of GST) during that year. The business closing stock at the end of the year was valued at $5 million and it had sales revenue for the year of $22 million (inclusive of GST). Required: Advise Geoffrey as to which expenses he can claim deductions for under Div. 40 ITAA97 and advise him as to what Geoffrey's Revolutionary Chair Company's taxable income for the year with reference to legislation and to case law where relevant