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can someone please answer these questions with Australian taxation rules. especially the last question on the document GENERAL DEDUCTIONS TUTORIAL PROBLEMS QUESTIONS TO BE RESEARCHED

can someone please answer these questions with Australian taxation rules. especially the last question on the document

image text in transcribed GENERAL DEDUCTIONS TUTORIAL PROBLEMS QUESTIONS TO BE RESEARCHED BY STUDENTS PRIOR TO CLASS AND DISCUSSED IN CLASS QUESTION 1: Which one of the following would most likely be classified as revenue expenses and be deductible under s 8-1 of the ITAA97? 1. Company formation costs. 2. Costs of purchasing a security system installed by a judge at her home after her appointment to the court. The Attorney-General's Department insisted on the installation as a condition of her appointment. 3. Costs of demolishing plant that is no longer useful to make way for the construction of a new building. 4. Legal costs incurred by an accountant in acquiring a financial planning practice. 5. Legal costs paid by a builder after she was sued for compensation for faulty work on a building which she built for a client. QUESTION 2: Discuss the deductibility of the following expenses: A. Legal cost and travel and accommodation costs incurred by a jockey in the course of appealing successfully against a nine month disqualification for poor handling of a horse at a race meeting. Would the position be any different if the appeal was unsuccessful? B. Interest paid on money borrowed to purchase shares for investment purposes and insurance paid on an investment property to protect the building in the event of destruction C. Legal cost incurred by a professional rugby league player to obtain a release from New Zealand Rugby League CLASS EXERCISES: QUESTIONS 12.2 TO 12.9-12.10 ON PAGE 431 TO 434 OF TEXT BOOK. SELF STUDY QUESTION Save the Environment Pty Ltd was incorporated on 1 September 2000 by a group of optimistic engineers and environmentalists. The company was established for the purpose of carrying on a business of encouraging people to save water as well as develop new water saving devices for the household and industry. This included looking at water desalination. The State Government offered them a vacant site in Mildura 15 kms from the fruit growing region to build a plant to manufacture these new water saving devices as well as developing a model plant for water desalination. The cost of the site was $3,500,000 (market value was $5,000,000). It was purchased on 1 December 2005. On 1 August 2008 the company advised the local council and the people of Mildura that it would commence to build its model desalination plant from 1 October 2008 as it had been granted the necessary permits by the State Government. The Mildura Environmental Protection Group lobbied for the plant to be stopped as the plant would affect the wild life in that area. Also the fruit growers association of Mildura lobbied against the plant as it would diminish their already low supplies of water. After a series of protests and court cases the permits granted by the State Government were held to be invalid and as a result the company abandoned the site altogether. During this period the company was liable for the following costs: $500,000 to clean up existing pollution on the site $350,000 in legal fees defending the legal actions bought by the environmentalists and the fruit growers. $50,000 in legal fees to defend a criminal action against one of the directors for assaulting an environmental protester at a rally against the company The director was found guilty and fined $8,000 which was paid by the company. $40,000 penalty imposed by the Environmental Protection Authority for toxic discharge into the river Required: Advise the company what deductions if any it can claim for the year ended 30 June 2009. In your answer you are required to refer to the relevant sections in the ITAA 1936 or 1997 as well as case law to support your answer. 20 MARKS 36 MINUTES

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