Which of the following expenses ARE deductible?

(NB: this a multi-select question: you must select all the correct responses and no incorrect responses to earn full marks for this question).

Select one or more:

a. Judy is employed as a personal assistant for the HRH, the princess of Denmark, and claims $20,000 for her evening gowns required to attend formal events

b. A taxpayer who is an electrician and a cricket player, incurs travel and legal expenses in considering whether to change cricket teams

c. Edward pays $40 per hour to his son to work as a paralegal at his law firm. All other paralegals are paid $25 per hour. Edward claims the $25 per hour rate as deduction

d. Travel expenses incurred by a doctor to fly from Orange hospital to a clothing business they own in Melbourne

In the case of Broken Hill Theatres, the High Court found that:

(NB: this a multi-select question: you must select all the correct responses and no incorrect responses to earn full marks for this question).

Select one or more:

a. Legal expenses were heard annually, and therefore were deductible as the taxpayer was only free from competition every 12 months

b. Legal expenses were capital , even though no new right or tangible asset was acquired

c. Legal expenses incurred to defend title or position are deductible under s8-1

d. Legal expenses were capital as they were made on particular and isolated occasions and they protected the taxpayer's income earning structur

Which of the following expenses could be claimed under the capital allowance regime?

(NB: this a multi-select question: you must select all the correct responses and no incorrect responses to earn full marks for this question).

Select one or more:

a. The cost of $10,000 to install new lights in a shopping complex

b. Legal expenses incurred by a taxpayer to raise equity for a business

c. The cost of $200,000 to buy a block of land

d. The cost of $200,000 to build a block of flats for the purpose of renting them out

Which of the following expenses ARE NOT deductible?

Select one:

a. An accountant incurring expenses to complete their chartered accountant's program

b. A doctor travels 4000km to see patients a claims travel expenses using the cents per km method

c. Expenses incurred to purchase a black shirt and black pants by a head waiter of a restaurant

d. Legal expenses incurred by a business taxpayer to protect their reputation in a defamation proceedin

Which of the following expenses ARE deductible (and where relevant, consider the 2019 income year only)?

(NB: this a multi-select question: you must select all the correct responses and no incorrect responses to earn full marks for this question).

Select one or more:

a. A convicted drug dealer robbed of cash during an attempted purchase of drugs and claims for the loss incurred

b. A compensation payment made to terminate employment of a manager, which reduces future expenditure of the business

c. A $500 subscription to a professional journal paid on 30 June 2018, to commence from 1 July 2018.

d. Expenses for a doctor's surgical gown and scrubs to perform surgery

David decides to make some renovations to his bakery. He decides to build a new office at a cost of $20,000, and installs a new bread processor at the cost of $10,000 on 1 January 2019 (which has an effective life of 5 years). Calculate how much David can deduct for his new processor for the 2019 income year using the prime cost method.

Select one:

a. $991.78

b. $5,950.68

c. $1,983.56

d. $2,975.34

Which of the following expenses are NOT deductible under s 8-1?

(NB: this a multi-select question: you must select all the correct responses and no incorrect responses to earn full marks for this question).

Select one or more:

a. A flight to Hong Kong to visit family and friends

b. A payment of settlement claim that arose from a manufacturing business which closed eight years ago

c. An archaeologist's flight to Italy and France to visit various museums and historical buildings, which leads to a promotion at work

d. A soldier employed by the Australian Defence Force who incurs travel expenses to transport his deployment kit

Sarah is the owner of the campus bookstore at a local university. She notices a few cracks in the walls and some broken windows, and spends $20,000 to fix them. After they are fixed, the broken windows appear different, but Sarah has been advised that their efficiency has not changed. Which of the following is MOST LIKELY correct?

(NB: this a multi-select question: you must select all the correct responses and no incorrect responses to earn full marks for this question).

Select one or more:

a. The expense is an "initial repair" and not deductible

b. The expense will constitute an "improvement" and can be claimed as a capital work under Division 43

c. The expense will constitute an "improvement" and form part of the cost base of the building

d. The expense will constitute a "repair" and is deductible under s25-10

Mayas brother Rahul is in a lot of trouble, and has $100,000 debt owing in order to discharge his mortgage. Maya lends him $2 million that she borrowed from the bank to help him out at an interest rate of 1%. Rahul is very grateful for Mayas help, and uses the funds to discharge his debt, and invests the remaining money in some shares. Maya is currently paying the bank at 12.5 interest. Which of the following statements are true?

Select one:

a. Maya will be entitled to claim a deduction at 12.5% as it is incurred in gaining assessable income from Rahul (by way of 1% return on the funds she lent)

b. Maya will be entitled to claim a deduction at 1% as the purpose of the arrangement is private and domestic, and partly motivated by tax minimisation

c. Maya will be entitled to claim a deduction at 11.5% as the purpose of the arrangement is private and domestic, and partly motivated by tax minimisation

d. Rahul will be entitled to claim a deduction at 12.5% as it is incurred in gaining assessable income from the shares.

In the case of Herald & Weekly Times, the court found:

(NB: this a multi-select question: you must select all the correct responses and no incorrect responses to earn full marks for this question).

Select one or more:

a. The payment of damages are not deductible under s26-5 as it is a penalty

b. The expense was in respect of a libel claim, an inevitable and unavoidable consequence of newspaper publishing

c. The expense was incurred in respect of an actionable wrong committed by the taxpayer not directly related to its income-earning process

d. Libel and alleged libel claims are published with the sole purpose of selling newspapers