Question 1: (total = 10 marks)

All students are required to advice Zoey on the following:

1. Advise Zoey on the assessability of the a) 60,000 and the b) $3,000. Explain with reference to income tax legislation, tax cases and ATO material (5 Marks)

2. Advise Zoey on the deductibility of the $4,000 car expense. Explain by reference to income tax legislation, tax cases and ATO material. (5 Marks).

Zoey worked as a sales manager for a large publisher in North Ryde (WC) from 2010 to 2020. Now she works for pharmaceutical company as a sales manager.

Zoeys duties when working for WC were to consult with tax academics, mainly tax lawyer lecturers and tax academics at universities in Melbourne and New South Wales in order to promote her employers publications to the university tax lawyers and tax law students.

Zoeys fixed salary was $ 80,000 plus commission that was calculated based on the sale made by WC because of Zoeys efforts. The commission was about $30,000 per year.

The company was very slow in paying the commission to all the sales representatives, and finally the company hired a lawyer to try and get WC to pay the outstanding commission and to force the company to make payments on time.

The lawyer was successful and finally, on the 25 May 2020, Zoey received a statement listing the amount of payment stating the amount that was deposited into her bank account:

Item

Amount

Explanation

Commission

60,000

This amount represents commission earned

Interest

3,000

This amount is calculated at 5% of the outstanding commission payable from the time it became payable under the employment contract to the date of payment.

Zoeys current job as a sales manager with a pharmaceutical company GSK, requires her to work longer hours and to visit medical centres and talk with doctors. Her current remuneration is a fixed salary of $90,000 plus commission. Zoey needs to use her car to carry out her job and GSK will pay Zoey an amount per kilometre travelled if she uses her car to carry out her job.

Zoeys car expenses for travel between her home and the medical centres, five days a week for the 2019-2020 income year is $5,000. Zoey received a car allowance of $20,000 during the 2019-2020 income year from GSK.

please i need the solution within an hour