Case Study

You run an accountancy practice and a new client, Miss Dundee, asks you whether the following outgoings incurred by her are allowable deductions. Miss Dundee has recently completed her medical degree and taken up employment in Broken Hill hospital. Her parents are very proud of her achievements and will miss their daughter, in the short term, when she moves to Broken Hill. Broken Hill is a city in the far west region of outback New South Wales. It is a mining town with deposits of silver, lead and zinc ores. The distance between Sydney to Broken Hill is 1,142 kilometres. She incurred the following outgoings:

(a) Travelling to Broken Hill for the job interview: $400

(b) Moving from her home in Sydney to relocate in Broken Hill: $2000

(c) Purchase of compulsory doctors' whites uniform to wear at work: $500

(d) Childcare expenses for her three-year-old daughter: $25,000

(e) Cost of telephone calls from her home phone to the hospital after hours to check on patients: $200

(f) Purchase of meals at the hospital when working evening shifts: $680

( (g) Speeding fine incurred on her way to work: $115

(h) Travel to and from work: $480.

Required: Are the outgoings a deductible expense or expenses of a private and domestic nature? You must cite relevant cases, ATO rulings, and legislative references to support your answers. Your response must also provide reasons that explain and support your answers.

Your written response to this assignment must be presented in a report format. Bullet points are not acceptable.

To prepare a report in a problem type question, remember to:

1. clearly understand the facts and the question.

2. state the tax issue(s) you have identified from the facts.

3. identify the relevant law, tax rulings, legislation, and cases.

4. apply the law to the facts. form your conclusion based on your discussion of the law and state additional information that may be needed to clarify your conclusion.

Issue - Identify the issue. Rule - Identify the relevant law(s).

Application - Discuss the relevant rule(s)/law(s) by applying them to the facts.

Conclusion - Round-off your discussion by forming a conclusion