QUESTION 25 Kavss and hoe are sualifi hat the hiwmnvide ervieen te sie putitis tut they have wwently egree bown emnet suppot t 880 000 phx 520,0o0 for each of the pest theee yenre on diton bss ad leave town tot at least tiree yeas loe ngwed to kirens Karen paid him the relevant amounti Bsseud ow thene tets, which of the folowing atnenta would be mest correet is o Karen'a aility to claim tax deduetions for the payments to Jee ules s s 1 atthe oome Tas Assessment det 19971 ) the payments relate to sirculating capital and are accordingly deductible nyments were necessorily incured in the course of carrying on Karen's business and are deductible te payments were incurved to expand Karen's business and carn how wxossable income and should be tax deduetible The payments seck to establish or expand Karen's business entity and are thorefore capital in nature and not deductible ) The payments secure a temporary advantage no different from the paying an amual premium for an advertising campaign. QUESTION 26 Reley is a crop farmer (primary producen) who uses a tractor in his business yoeatviss. On I May 2016 he paid $13,000 to replace the engine in the tractor. The restacement engine was 250 hp (187.5 kW) while the old engine was 175 hp (1312s kWa. Roley originally purchased the tractor on 4 June 2008. Assuming that Rekys wwwuntant advised him that he could not claim a deduction for the $13,000 under sec 38 10 of the Income Tax Assessment Act 1997, for which of the following reasons woukd his accountant have given this advice? ) The repairs were "terminal repairs." b) The repairs constituted a significant improvement to the tractor. c) The repairs were "notional repairs." ) The engine constituted an entirety and was an asset in its own night. ) The repairs were "initial repairs" QUESTION 25 Kavss and hoe are sualifi hat the hiwmnvide ervieen te sie putitis tut they have wwently egree bown emnet suppot t 880 000 phx 520,0o0 for each of the pest theee yenre on diton bss ad leave town tot at least tiree yeas loe ngwed to kirens Karen paid him the relevant amounti Bsseud ow thene tets, which of the folowing atnenta would be mest correet is o Karen'a aility to claim tax deduetions for the payments to Jee ules s s 1 atthe oome Tas Assessment det 19971 ) the payments relate to sirculating capital and are accordingly deductible nyments were necessorily incured in the course of carrying on Karen's business and are deductible te payments were incurved to expand Karen's business and carn how wxossable income and should be tax deduetible The payments seck to establish or expand Karen's business entity and are thorefore capital in nature and not deductible ) The payments secure a temporary advantage no different from the paying an amual premium for an advertising campaign. QUESTION 26 Reley is a crop farmer (primary producen) who uses a tractor in his business yoeatviss. On I May 2016 he paid $13,000 to replace the engine in the tractor. The restacement engine was 250 hp (187.5 kW) while the old engine was 175 hp (1312s kWa. Roley originally purchased the tractor on 4 June 2008. Assuming that Rekys wwwuntant advised him that he could not claim a deduction for the $13,000 under sec 38 10 of the Income Tax Assessment Act 1997, for which of the following reasons woukd his accountant have given this advice? ) The repairs were "terminal repairs." b) The repairs constituted a significant improvement to the tractor. c) The repairs were "notional repairs." ) The engine constituted an entirety and was an asset in its own night. ) The repairs were "initial repairs
