Nathan is a financial analyst and advisor and works for a large finance company in Sydney. In the tax year 2021-22, Nathan received a salary of $120,000 from the employer. He also provides per time consultancy services as sole trader. During the last couple of years, Nathan had been planning to set up an office for his business. He notices a consistent rise in the number of clients and plans to establish a dedicated office at home. Nathan arranges funds by selling a small unit for $220,000 on 10 February 2022 (which he had purchased for $170,000 in 2018). He hires a builder to construct an office room for full-time use to meet clients during after-hours and on weekends. The office construction is completed on 1 March 2022 and costs Nathan $60,500. The following information relates to his consulting business for the financial year 2021-22 (where relevant, amounts are GST inclusive).

Nathan sometimes travels interstate to meet clients of his consulting business. In the year 2021-22, Nathan had three such trips when he travelled in business class on an expensive airline. The trips cost him $6,600 (although he could have reduced that cost to $3,300 had he travelled in economy class using budget airlines).

Required: Using relevant legislation and case law to support your answers, please:

a) Calculate the amount of expenses, if any, which Nathan could claim as deductions from the cost of office construction and air travel expenses?

b) Calculate Nathans taxable income for the year 2021-22. Your answer must include an explanation of every item you include or exclude from the calculation (carry forward figures from part a, if any).

c) Calculate any Medicare Levy Surcharge payable by Nathan for the tax year 2021-22. (Note: Nathan does not have any private health insurance)

\begin{tabular}{|l|c|} \hline Item & Amount \\ \hline Receipts from customers & $88,000 \\ \hline Stationery (50\% is used for his employment work) & $2,200 \\ \hline Membership fee for a recreational club set up by finance and accounting practitioners & $3,300 \\ \hline \end{tabular} \begin{tabular}{|l|c|} \hline Item & Amount \\ \hline Receipts from customers & $88,000 \\ \hline Stationery (50\% is used for his employment work) & $2,200 \\ \hline Membership fee for a recreational club set up by finance and accounting practitioners & $3,300 \\ \hline \end{tabular}