this assignment about Australian tax law . please find in the attachment .

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BFA714 Assignment Semester 2 2015 BFA714 Australian Tax Law Semester 1 2016 Assignment (Interview) Task description Due date A paper copy of the assignment must be submitted by 3 pm on Friday 22April 2016. Task description You are required to prepare the tax return for an individual taxpayer using e-tax 2015 and compile a supporting report to the client discussing the various issues involved in preparing the return. Weighting Your mark for this assessment is worth 15% of the total mark for the unit. Refer to the assessment rubric at the end of this document for information on the assessment criteria that we will use to determine your mark for this assessment. It is important to understand that your interview that determines most of the available marks for this assessment. Submission information: The assignment (including a coversheet, tax return and the supporting report) is to be submitted in paper form. The various parts of the assignment compiled in the following order: 1. Signed assignment coversheet 2. Supporting report 3. Printout of tax return included supporting documents (see below) The paper assignment must be submitted at the following location: The assignment box on Level 3 of Centenary Building. Supporting report You must complete a supporting report (12 pages maximum) which includes your explanation and justification for inclusion or non-inclusion of items in the tax return. Your explanations should be supported by references to appropriate legislation/case law/tax rulings. You are writing this report for the attention of your client (Brian Roberts) so make sure that you begin your report with a short paragraph of introduction. You must submit a printed copy of the supporting report (as part of your bound assignment - see above) and submit the same electronically via Turnitin on MyLO. The assignment you submit must be your own work and where plagiarism is detected, 1 BFA714 Assignment Semester 2 2015 the mark for this assessment will be 0/15. All similarity reports on Turnitin will be thoroughly checked. e-tax software For the purpose of completing this assignment, you will need to download the e-tax 2015 software from the Australian Taxation Office website. e-tax 2054 can be downloaded from the following URL: https://www.ato.gov.au/printfriendly.aspx?url=/Individuals/Ind/Downloading-andinstalling-e-tax/ Please follow the instructions to install the software on your computer. Note that you need to download e-tax, NOT MyTax. You do NOT need to lodge the tax return, so you do NOT need to create a myGov account. Once you have successfully downloaded the software, create the file BRIAN2015 and enter Brian's TFN: 123 123 111 (make sure that you remember where you saved the file on your computer). Note that you will need to enter Brian's TFN every time you wish to access the e- return. The group is required to complete, print off (but not lodge) Brian's 2015 income tax return using e-tax. In submitting Brian's 2015 income tax return, the group is required to tick the following options in e-tax print options: tax return pages; supplement to the tax return; business and professional items schedule (if required); rental property schedule; capital gains tax schedule; schedules of additional information; tax calculation; worksheets; capital gains worksheets; and depreciation worksheets. Please print either one page per A4 page or two (2) pages per A4 page and insert in your final bound assignment (see above). Again, you should NOT lodge Brian's tax return 2 BFA714 Assignment Semester 2 2015 CLIENT INFORMATION General facts Brian Roberts is 37 years old and is an Australian resident for tax purposes. Brian is an employee teacher working for Guilford Young College. Brian has been working as an English teacher since he completed his Diploma of Education degree fifteen years ago. He lives in a house in Sandy Bay, is single, and has no dependants. Brian is completing a Master of Education at UTAS part time. He attended classes two nights a week during each Semester. Brian used the services of his uncle (who is not a registered tax agent) to help him complete his 2013/14 tax return. His uncle sent him an invoice of $330 for the tax return preparation. Brian paid it on 25 July 2014. Brian paid his 2013/14 income tax liability three months late, so the Australian Taxation Office (ATO) imposed $146 in general interest charges (GIC), which he paid on 2 February 2015. Brian has supplied you with the information below relating to his personal income tax affairs for the year ended 30 June 2015. However, he is not certain whether everything he has provided you with is assessable or deductible. Because of his uncertainty, he has asked you to carefully consider each item and determine whether it is assessable or deductible. Brian wishes to minimise his 2014/15 taxable income wherever legally possible and he will be lodging income tax returns in further years. Assume that the amounts detailed below are all of Brian's receipts and expenditure for the 2014/15 income year, and that all of his expenses are correctly substantiated (unless stated otherwise). Personal information Full Name: Brian Roberts Date of Birth: 30 May 1978 Occupation: Teacher Tax File Number: 111 222 333 Telephone Number: (03) 5522 8877 Home Address: 11 New St Sandy Bay, Tasmania, 7005 Brian has full private health insurance (combined hospital and ancillary (extras) cover with an excess of $250) and has maintained this for the whole income year. He claimed the private health insurance offset upfront so that he was able to pay lower monthly premiums. The statement from his health fund included the following information: 3 BFA714 Assignment Semester 2 2015 Medical Benefits Fund ID: MBP Membership Number: 2233 9874 21 Premium paid: $1,395 Rebate claimed: $419 Benefit Code: 30 Salary and Wages During the 2014/15 income year, Brian worked as a teacher for Guilford Young College. Brian was provided with a PAYG Payment Summary from his employer for the period from 1 July 2014 to 30 June 2015, which included the following information: Name of Payer: Guilford Young College ABN of Withholder: 00 111 222 789 Gross payments: $87,590 Car Allowance: PAYG tax withheld: $184 $21,948 Note that the gross payments of $87,590 include an amount of $1,020 for annual leave that was paid to Brian on 27 June 2014, although he did not take the leave until 5 July 2015. Brian does not have a HELP debt or a Financial Supplementary debt, or any trust distributions. 4 BFA714 Assignment Semester 2 2015 Expenses During the 2014/15 income year, Brian incurred a number of expenses that he believes are related to his employment as a teacher. Brian informs you that he has receipts for all the following expenses. Expense Amount Australian Education Union membership For the year 2014/15 $1,320 Annual membership of the English Teachers Association of Queensland (Brian started his teaching career in Brisbane) $420 Annual subscription to the Weekend Australian which Brian uses as a teaching resource $156 Attendance at Teaching Conference Brian attended an annual two-day education conference for secondary teachers held in Adelaide in April 2015. The school did not require any of its teachers to attend the conference. Brian attended with two of his colleagues who usually go to the conference every year as they see it as useful and informative. Brian paid for the following expenses: Conference registration fee $750 Airline tickets $590 Accommodation for one night Taxi travel to and from the airport in Adelaide and Hobart Lunch was provided at the conference, Brian paid for his other meals on each of the two days: -Breakfast ($22 and $29) -Dinner ($38 and $45) $175 Note the school reimbursed Brian for the cost of the taxi travel ($244) 5 $244 $51 $83 BFA714 Assignment Semester 2 2015 Expense Amount Home office expenses Brian often prepares for his teaching and marks his student's work at home. He set up a 'home office' in a separate area of his house; this takes up 15% of the entire floor space of his house. A colleague at his school told him that he can claim deductions for a proportion of the following expenses: Interest on mortgage loan Council rates $3,000 $1,500 Water rates $800 Home insurance $700 Electricity $1,400 Vehicle Information Brian uses his own car when he has to travel between the Hobart and Glenorchy campus for a weekly staff meeting. The vehicle is a 2.0 litre Toyota Corolla (with an ordinary engine) which Brian purchased outright on 1 May 2013 for $26,000 (including GST). Brian has kept a logbook for the vehicle and according to his logbook, over a twelveweek period the car travelled 1,212 kilometres. This total was made up of: Travel from home to usual workplace and back home 552 km Travel from usual workplace to Glenorchy campus 89 km Travel from Glenorchy campus to home 95km Travel to visit friends and family 454 km Travel from work to university 10km Travel from university to home 12km The expenses that Brian incurred over the whole income year in relation to the vehicle were as follows: Registration Insurance $ 720 $ 840 6 BFA714 Assignment Semester 2 2015 Expense RACT membership Fuel Maintenance Car washes Amount $ 149 $3,160 $1,380 $ 240 Brian receives a car allowance from the school, paid at the rate of 30c per kilometre, for travel between campuses and travel from Glenorchy to home. Ties Brian's employer requires all male teachers to wear a tie to work. In order to comply with the school's dress policy, Brian purchased three ties during the year for a total cost of $150. Brian has never worn the ties outside of work and he does not intend to do so. $150 Brian purchased stationery items on 6 occasions during 2014/15, in each case he spent less than $10. He has misplaced all the receipts for these purchases. $55 In 2014/15, Brian purchased several books and DVDs that he used exclusively for his teaching at a total cost of $330. $330 Brian also incurred some other expenses during the 2014/15 income year that he thinks that he may be able to claim a tax deduction for. Gifts and Donations During the 2014/15 income year, Brian made the following payments: Payment Amount Tasmanian Eye Institute Limited $300 50 tickets in a raffle organised by the Australian Heart Institute; first prize is a new car $500 7 BFA714 Assignment Semester 2 2015 In addition to the above, Brian spends 2 hours every weekend working as a volunteer for the Salvation Army. He estimates the value of his work to be $50 per hour, which he believes is deductible. Apart from his employment income, Brian had a few other receipts during the 2014/15 income year including interest, and rental income, plus the proceeds from the sale of some assets. Inherited shares Brian's grandfather Greg bequeathed him a share portfolio, which Brian inherited on 1 September 1996. The details of Greg's share portfolio as at 1/9/96 are as follows: Company No. of shares Date of purchase Total purchase price Market value at 1/9/96 BHP 300 31/7/84 $1,694 $4,746 CBA 200 31/7/92 $1,440 $2,180 On 1 July 2015, Brian decided to sell all his shares in BHP and CBA, to help with the rental property purchase. His capital proceeds from the sale of CBA shares are $16,200 and $10,146 from the sale of his BHP shares. Books When Brian's grandfather died, he also left him a rare first edition book - The Two Towers by J.R.R Tolkien (Volume 2 of The Lord of the Rings) that he had acquired in 1970 for $20. This volume was published in Boston in 1965; its market value at the time of Greg's death was estimated at $120. After his grandfather's death, Brian found the other two volumes from the same edition at a local bookshop and purchased them for $260 and $320 respectively on 22 January 2015. Brian then sold the set of three volumes for $1,400 on 29 May 2015. Boat Brian sold his boat for $11,000 on 14 June 2015 to a private buyer. Brian did not use the boat for income producing purposes. He had bought the boat second-hand for $10,500 on 7 May 2011. Brian had some repairs done to the boat in May 2013, at a cost of $1,100. Other costs of ownership include a total of $250 for the annual insurance premium that Brian has paid since he acquired the boat. Rental Property - House at 1001 View St, Sandy Bay Brian borrowed $300,000 from the Commonwealth Bank (CBA) on 1 July 2014, all of which he used to finance the rental property purchase. He incurred a $1,200 loan establishment fee. The term of the loan is 25 years. On 7 July 2014, Brian purchased a three-bedroom house (constructed in 1965) located at 1001 View St, Sandy Bay for $578,000. In acquiring the property, he incurred legal 8 BFA714 Assignment Semester 2 2015 fees of $900 and stamp duty of $15,860. The house was listed with Derwent Realty as 'available for rent' as of 11 July 2014. On 29 July 2014, the real estate agent advised Brian that there had been no applications from tenants, even though many people had viewed the house. Brian was convinced that the previous owner's decision to paint the walls of the house bright orange (two weeks before selling it to Brian) was the reason there were no interest tenants. On 30 July 2014, Brian paid a total of $10,000 for the walls to be repainted white. On 18 August 2014, tenants signed a one-year lease and moved in. In the 2014/15 income year, Brian derived gross rental income of $18,700. Expenses relating to the rental property for the 2014/15 income year are as follows: Council rates Cleaning Insurance Interest on CBA loan (for current year) Pest control Stationery and postage Pre-purchase building inspection Property management fees $ 2,000 $ 380 $ 1,420 $14,460 $600 $ 18 $ 350 Brian rents out the house partly furnished. On 28 July 2014, he purchased the following items for the house: Heat pump (air conditioner) Washing machine Microwave oven $1,280 $ 950 $ 250 Brian wants to use the diminishing value method to calculate any decline in value claims and he does not wish to pool any low value assets. 9 BFA714 Australian Tax Law, Semester 2, 2015 Assessment Rubric for Interview Assignment (15% of final grade) High Distinction (HD) Distinction (DN) Credit (CR) Pass (PP) Fail (NN) Criteria (90-100%) Locate and apply to the scenario sources and principles of tax law Locates and applies to the scenario a high number of relevant sources and principles of tax law and explains these verbally. Verbal communication demonstrating analysis of real life situations, identification of the issues involved and the application of tax law to form a conclusion or recommendation Critical reflection Written communication of results (80-89%) Demonstrates high-level verbal communication, is easy to understand and fluent; initiates conversation when appropriate. Demonstrates comprehensive knowledge of the topics discussed and engages in the conversation using logical, informed and reasoned arguments. All interview questions answered quickly and decisively. Language is appropriate for a tax professional. Without prompting: applies multiple perspectives to an issue or concept and explains their relevance; clearly expresses insightful self-reflection. The tax return is thoroughly completed and information in the accompanying report is well presented and logical, clear and complete. (70-79%) (60-69%) (50-59%) (0-49%) Locates and applies to the scenario many relevant sources and principles of tax law and explains these verbally. Locates and applies to the scenario several relevant sources and principles of tax law and explains these verbally. Locates and applies to the scenario some relevant sources and principles of tax law and explains these verbally. Locates and applies to the scenario limited relevant sources and principles of tax law and verbal explanation is lacking. Demonstrates very good communication skills, is easy to understand and relatively fluent. Demonstrates a very good knowledge of the topics discussed and engages in the conversation. Most interview questions answered quickly and decisively. Language is appropriate for a tax professional. Demonstrates good communication skills and is easy to understand most of the time. Conversation flowed and developed satisfactory. Demonstrates a good knowledge of the topics discussed and engages in the conversation. Answers most interview questions. In some instances, language used is appropriate for a tax professional. Demonstrates reasonable communication skills and is understandable. Some breaks in the conversation. Demonstrates some knowledge of the topics discussed. Requires prompting during the conversation and answers some questions. Occasionally uses language appropriate for a tax professional. With limited prompting: applies several perspectives to an issue or concept and explains their relevance; expresses insightful self-reflection. With some prompting: applies some perspectives to an issue or concept and explains their relevance; expresses selfreflection. With prompting: applies some perspectives to an issue or concept and partially explains their relevance; limited selfreflection. Limited ability to apply perspectives to an issue or concept, very limited selfreflection. The tax return is thoroughly completed, but there are some minor missing items. Information in the accompanying report is well presented and logical, clear and complete. The tax return is reasonably well completed but there are a few missing items. The information in the report is presented in a reasonable way that is quite easy to read. The tax return is reasonably well completed but there are several missing items. The report is presented in a reasonable way that is quite easy to read. The report is difficult to read and/or poorly presented and the tax return in incomplete. Does not speak fluently and is difficult to understand. There are several breaks interrupting the flow of the conversation and the student demonstrates a limited knowledge of the topics discussed. The student fails to answer all questions. Several instances of language that is inappropriate for a tax professional