Question
Please slove fast and use Australian taxation law for reference Steve is an editor employed full time at a major Australian book publisher WritePublishing. In
Please slove fast and use Australian taxation law for reference
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Steve is an editor employed full time at a major Australian book publisher "WritePublishing". In his spare time, Steve enjoys writing short stories about maritime disasters. Steve has never submitted any of his work for publication, as he writes for his own pleasure. In August 2020, in the Sydney Morning Herald newspaper, Steve notices that there is a national short story competition with a first prize of $30,000. He enters the competition and submits an intriguing and articulate short story which he has written about a submarine which is sunk and disappears into a deep ocean trench in the Pacific. A few weeks later it is announced that he has won the first prize of $30,000 in the national short story competition. Shortly afterwards, in October 2020, Steve is approached by a publisher "CatchPublishing" to sign a contract to release a book containing several of his short stories. (Catch Publishing is not his current employer, WritePublishing, with whom he continues to be employed on a fulltime basis.) His employment with WritePublishing is his main source of income. In October 2020, Steve signs the book publishing contract and Catch Publishing releases a book entitled "20,000 Leagues under the Sea" with the short stories that he has written in his spare time. Instead of a lump sum payment for his intellectual property, Steve receives a percentage of the sale price of each book. During the 2020/21 year of income, he received $2500 from sales of his book. He is not concerned about whether the book is a commercial success however he is so pleased to see his work being published. To celebrate he goes on a cruise (costing $5000) with his wife to New Zealand and Antarctica in November 2020. His wife asks him if he can claim the $5000 expense as a tax deduction. Steve is not sure, however he is not bothered with keeping records of his expenses in any case. He does not anticipate publishing another book of short stories. Required: Advise Steve regarding the income tax implications arising from the above facts in relation to the 2020/21 year of income. In your answer make sure you refer to any relevant cases, legislative provisions, tax rulings and principles of tax law.
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