She recelves $300.000 per annum in salay trom the Too Co. In addition to her salary. Saly received an annual performance bonus of $100,000 an 15 June 2022 as she had met certain biling tarpets. Saly's investment pertolio comprises of the following Sally lowes cooking (oaricularly Fresch cuisine) and dreamed of having her own catering business or restaurant down the South Coast. She loves watching TV shows like MasterCook. She bought all of the latest apsliances for her home kitchen. Her triends inviled her to their partes tecause they knew Sally wosld make fantastic canapes to have with dinks. Sally was busy mont weekends cooking for the parties she would athend in the evenings. Sometmes her triends would oller to pay for the ingredients whe used in making the party food. She charged prices for her food that oely covered the cost of the ingredients. She paid for everything using cash and threw the receigts into the kitchen drawer. The owner of a stylith caft in Manula. Rita, cortactiod Saly atter eating her food at a party in Red Hill. Saly agreed io supply prepared food (cakes and cooked meals) for Rita's cale. In early July 2020 Saly placed eards on the sales counter in Rita's cale with her photo and coctact dotals. Fias's sales in the cafe increased and Sally' phone rang oft the hook. Pecple were keen to buy Sally's prepared food and eat in in their home. Sally employed an accountant to keep her books of account and devekp plans to grow the revenue trom her cooking. The eccountant told her to set up a webeite so people could read about Saly and her food. Saly was very busy and employed two apprentise chels to hep her with cooting the food. Very soon Sally was supplying her food to cates and restaviants around Canberia and also sold her food onine through her websile. in the 2021 incone year, $ ally earned $80,000 trom the catering activity, and $125.000 in the 2022 ncome yeu. Aler many years of watching MasterCsck Sally was invited on to the show as a competitor. After a grueling few wteks of compettion with the oftier cocks Saily was crowned 2021 MasterCook of the year (in Dec 2021). Her prize was a complele new kichen worth $50,000 to be instaled by the best kitchen design company in Australia. The pripe wis nondransleratle. Sally wanted to move her catering activiy to somewhere bigger so that she could increase the range of prepared food she sells. She decided to renovate the house that she awned near the beach in Bateman's Bay. She bought the praperty back in 2018 as a frend loid her that the Balemanis Bay asea, being a holdary destination close to Canberra, was becoming popular and the land would increase in value in the next to years. Sally engaged an architect to hep her renovate the house in Bateman's Bay. The archanct advised Saly to find anether place for her catering kitcheo and tum the house and land in Bstemanis Bay into a 50 -unit apartment block and sell the apartments. Sally thought this was a better idea. Sally built the apartment block using a buldoe who charged her $14.5million to do the construction. The valoe of the land at the dime the comtruction commenced was $1.1 milion. She sold at of the units in the apartment block in Jaruary 2022 for $50 received fully franked dividends of $4,000 in the 2022 income year. Required: Explain to Sally how the gains in the above-mentioned transactions would of would not constitute assessable income under the income tax legislation. Use relevant legislation and case law to support your answer. Include calculations if required. I you decide that an amount is a capital receipt assume it is not assessable income for the purposes of the Assignment (ie, there is no need to calculate the capital gain). Item 2-Sally's Expenses Sally works 3.5 days (Monday to Thursday) a week for TopCo and spends 1.5 days (Thursday and Friday) a week in her kitchen at home. Sally incurs the following expenditure during the 2022 income year: - She pays $3,000 to the local greengrocer for fresh vegetables to use in her catering activity. - She recelves a $500 speeding fine on the way to Woolworths to buy food. - On 1 April 2022, she buys a laptop to use in the catering activily, costing $3,600. The Commissioner states that the laptop should last 3 years. Sally uses the taptop 15% of the time to stream movies and watch MasterCook: - She travels between her office at TopCo and home 5 days a week, by bus, at an annual cost of $1,200. - Sally uses the kitchen to make the food and one of the bedrooms in her home as an. office to do administration relating to the cooking activity. She pays $3,500 per month in interest on her home loan and $800 per month in heating and cleaning costs for the home. She spends 25 hours per weok on the cooking activity in the kitchen which is also used for family purposes. The kitchen and the bedroom take ip 25% of the space in the house (15\% kichen and 10% bedroom). - Sally employs two apprentice chefs to help preparing the food she sells to Ruta, paying a total of $20,000 in wages per year. - In July 2021, Sally traveiled to France for 4 weoks, primarly to undertake a French language course at the Sorbonne University in Paris. The air fares and accommodation cost $15,000. The University fees costs $5,000. The course lasted for 3 weeks and she spent the other week travelling around the wine regions of France. Sally thinks her trip to France is fully deductible but her old accountant stated that it was not because it had no connection with her job or catering activity. - Sally was thinking about starting a new business - a cookery school. She asks her acocuntant to investigate the feasibility of the business before she decides. The acoountant's report cost $3,000. She decides to proceed with the business. Sally was approached at the same time by an international cooking school known as Le Bon Chef (LBC) which was impressed with her cooking skills and her protie in Australia. LBC wanted to have their brand become better known in Australia, and proposed to Sally that if she paid LBC $1m, she would be able to use the LBC brand name and business processes for 10 years. Sally entered into a contract on 30 May 2022 , and paid the $1m on 29 Jun 2022. Required: Using relevant legislation and case law, explain to Sally whether the amounts in the above-mentioned transactions would or would not be allowable deductions for income tax purposes in the 2022 income year. Show calculations where appropriate. Do not consider the trading stock rules. Required: Using legislation and case law, explain the GST implications of the transactions relating to the catering/cooking activity to Sally, and whether a GST liability or an input tax credit will arise (including the amount). Assume that all entities are registered for GST. All amounts are GST-inclusive (where applicable). Do not calculate the net amount for the purpose of the section 17-5 of the GST Act. Do not consider the GST consequences of Sally's building activity, the cookery school or the receipt of the dividends. Item 4 - Taxable Income and Income Tax Payable Required: Calculate Sally's taxable income and income tax payable for the 2022 income year. Use legislation to explain your calculation. If you need to make certain assumptions in performing the calculation, state them in your answer. 6 She recelves $300.000 per annum in salay trom the Too Co. In addition to her salary. Saly received an annual performance bonus of $100,000 an 15 June 2022 as she had met certain biling tarpets. Saly's investment pertolio comprises of the following Sally lowes cooking (oaricularly Fresch cuisine) and dreamed of having her own catering business or restaurant down the South Coast. She loves watching TV shows like MasterCook. She bought all of the latest apsliances for her home kitchen. Her triends inviled her to their partes tecause they knew Sally wosld make fantastic canapes to have with dinks. Sally was busy mont weekends cooking for the parties she would athend in the evenings. Sometmes her triends would oller to pay for the ingredients whe used in making the party food. She charged prices for her food that oely covered the cost of the ingredients. She paid for everything using cash and threw the receigts into the kitchen drawer. The owner of a stylith caft in Manula. Rita, cortactiod Saly atter eating her food at a party in Red Hill. Saly agreed io supply prepared food (cakes and cooked meals) for Rita's cale. In early July 2020 Saly placed eards on the sales counter in Rita's cale with her photo and coctact dotals. Fias's sales in the cafe increased and Sally' phone rang oft the hook. Pecple were keen to buy Sally's prepared food and eat in in their home. Sally employed an accountant to keep her books of account and devekp plans to grow the revenue trom her cooking. The eccountant told her to set up a webeite so people could read about Saly and her food. Saly was very busy and employed two apprentise chels to hep her with cooting the food. Very soon Sally was supplying her food to cates and restaviants around Canberia and also sold her food onine through her websile. in the 2021 incone year, $ ally earned $80,000 trom the catering activity, and $125.000 in the 2022 ncome yeu. Aler many years of watching MasterCsck Sally was invited on to the show as a competitor. After a grueling few wteks of compettion with the oftier cocks Saily was crowned 2021 MasterCook of the year (in Dec 2021). Her prize was a complele new kichen worth $50,000 to be instaled by the best kitchen design company in Australia. The pripe wis nondransleratle. Sally wanted to move her catering activiy to somewhere bigger so that she could increase the range of prepared food she sells. She decided to renovate the house that she awned near the beach in Bateman's Bay. She bought the praperty back in 2018 as a frend loid her that the Balemanis Bay asea, being a holdary destination close to Canberra, was becoming popular and the land would increase in value in the next to years. Sally engaged an architect to hep her renovate the house in Bateman's Bay. The archanct advised Saly to find anether place for her catering kitcheo and tum the house and land in Bstemanis Bay into a 50 -unit apartment block and sell the apartments. Sally thought this was a better idea. Sally built the apartment block using a buldoe who charged her $14.5million to do the construction. The valoe of the land at the dime the comtruction commenced was $1.1 milion. She sold at of the units in the apartment block in Jaruary 2022 for $50 received fully franked dividends of $4,000 in the 2022 income year. Required: Explain to Sally how the gains in the above-mentioned transactions would of would not constitute assessable income under the income tax legislation. Use relevant legislation and case law to support your answer. Include calculations if required. I you decide that an amount is a capital receipt assume it is not assessable income for the purposes of the Assignment (ie, there is no need to calculate the capital gain). Item 2-Sally's Expenses Sally works 3.5 days (Monday to Thursday) a week for TopCo and spends 1.5 days (Thursday and Friday) a week in her kitchen at home. Sally incurs the following expenditure during the 2022 income year: - She pays $3,000 to the local greengrocer for fresh vegetables to use in her catering activity. - She recelves a $500 speeding fine on the way to Woolworths to buy food. - On 1 April 2022, she buys a laptop to use in the catering activily, costing $3,600. The Commissioner states that the laptop should last 3 years. Sally uses the taptop 15% of the time to stream movies and watch MasterCook: - She travels between her office at TopCo and home 5 days a week, by bus, at an annual cost of $1,200. - Sally uses the kitchen to make the food and one of the bedrooms in her home as an. office to do administration relating to the cooking activity. She pays $3,500 per month in interest on her home loan and $800 per month in heating and cleaning costs for the home. She spends 25 hours per weok on the cooking activity in the kitchen which is also used for family purposes. The kitchen and the bedroom take ip 25% of the space in the house (15\% kichen and 10% bedroom). - Sally employs two apprentice chefs to help preparing the food she sells to Ruta, paying a total of $20,000 in wages per year. - In July 2021, Sally traveiled to France for 4 weoks, primarly to undertake a French language course at the Sorbonne University in Paris. The air fares and accommodation cost $15,000. The University fees costs $5,000. The course lasted for 3 weeks and she spent the other week travelling around the wine regions of France. Sally thinks her trip to France is fully deductible but her old accountant stated that it was not because it had no connection with her job or catering activity. - Sally was thinking about starting a new business - a cookery school. She asks her acocuntant to investigate the feasibility of the business before she decides. The acoountant's report cost $3,000. She decides to proceed with the business. Sally was approached at the same time by an international cooking school known as Le Bon Chef (LBC) which was impressed with her cooking skills and her protie in Australia. LBC wanted to have their brand become better known in Australia, and proposed to Sally that if she paid LBC $1m, she would be able to use the LBC brand name and business processes for 10 years. Sally entered into a contract on 30 May 2022 , and paid the $1m on 29 Jun 2022. Required: Using relevant legislation and case law, explain to Sally whether the amounts in the above-mentioned transactions would or would not be allowable deductions for income tax purposes in the 2022 income year. Show calculations where appropriate. Do not consider the trading stock rules. Required: Using legislation and case law, explain the GST implications of the transactions relating to the catering/cooking activity to Sally, and whether a GST liability or an input tax credit will arise (including the amount). Assume that all entities are registered for GST. All amounts are GST-inclusive (where applicable). Do not calculate the net amount for the purpose of the section 17-5 of the GST Act. Do not consider the GST consequences of Sally's building activity, the cookery school or the receipt of the dividends. Item 4 - Taxable Income and Income Tax Payable Required: Calculate Sally's taxable income and income tax payable for the 2022 income year. Use legislation to explain your calculation. If you need to make certain assumptions in performing the calculation, state them in your answer. 6