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LAW6001Assessment 2: Individual Case Study Page1of10
ASSESSMENT 2 BRIEF
Subject Code and Title
LAW 6001 Taxation Law
Assessment 2: Case Study (Individual taxpayer’s tax return)
For the Report 2000 words +/- 10% excluding References
a) Identify and analyse the tax treatment of various types of incomeand deductions.b) Effectively apply taxation law in determining tax outcomes invarious scenarios and sole trader structurec) Apply the legislation to determine the assessable income andavailability and amount of the tax deduction associated withemployment and business structure on an accrual basis including GSTapplication.d) Calculate the specific deduction associated with trading stockbalancese) Calculate depreciation using the prime cost and diminishing valuemethod and calculate an associated balancing adjustment followingthe disposal of a depreciating assetf) Preparation and calculation of individual income tax return onvarious income and deductions using current tax return form.
By 11:55pm AEST/AEDT Sunday of Week 7
Context:This assessment assesses your research skills, your ability to synthesise an original piece of work tospecific content requirements and your ability to produce a comprehensible piece of advice whichaddressing the client’s needs.It also assesses your written communication skills. The ability to deliver to a brief is an essential skill inthe workplace. Clients may well approach advisors seeking a combination of specific informationneeds and advice on the tax implications of a particular arrangement in the Australian tax jurisdiction.It is therefore important to be able to identify all the issues presented by an arrangement and to thinkabout the potential consequences of different approaches to addressing the client’s needs.Instructions:• Your case study needs to identify and discuss the tax implications of the various issues raised.LAW6001Assessment 2: Individual Case Study Page1of10• A report (word document, approx. 2,000 words) must be submitted for the calculations of theassessable income; allowable deductions and taxable income of the taxpayer including identifyingand discussing them. E.g., how the amounts of income & deductions have been derived. If anyreceipts and payments are not assessable or deductible, the reasoning for non-inclusion of thesein assessable income or deductions as per relevant legislation or cases.• Critically analyse the following case study.With respect to each task:• Review relevant case law and legislation (ITAA1936, ITAA1997)• Apply the law to the facts of the case study• Reach a conclusion/ give practical advice to your client.• You will be assessed in accordance with the Assessment Rubric.• This case study must be presented as an individual effort. The case study requires individualresearch. It is expected the student will survey the relevant literature, including decided cases, andselect appropriate additional resources.• Your case study is not just a list of answers. Your reasons for your conclusions andrecommendations must be based on your research into the relevant cases and legislation.• The format of the report should be a business report and using APA referencing styleLAW6001Assessment 2: Individual Case Study Page1of10Case Study: Comprehensive Individual Tax ReturnJeremy Wild, a resident single taxpayer aged 49. Jeremy runs a mixed business and has not electedto apply any of the small business entity concessions. Jeremy uses an accrual method.Jeremy’s records disclosed the following for the 2019/20 tax year. All amounts are GST exclusive.
Cash receipts from customers (sales)
Fully franked dividend Received
Proceeds from loan for shop repairsProceeds from sale of Motor vehicle – see note 1COVID19 Cash Boost payment from the ATOCOVID19 Job keeper payment from the ATO
Purchases of trading stock
PAYG Tax Instalments paid by Jeremy
Borrowing Costs (incurred on 1 May 2020 on an 8-year loan)
DrawingsRepairs – see note 2
Loan Repayments (interest only)
Net Wages to employee
PAYG tax withheld from employee’s wagesSuperannuation for employees – see note 3Annual/Personal leave paid – see note 4Personal Super contributionsPrivate health insuranceDrivers licence renewalLate lodgement fee relating to Business Activity Statement
Other Deductible Expenses
The motor vehicle had an adjustable value of $13,000 as at the date of disposal. The original costwas $54,000 in June 2017. The car was used 80% for business.Note 2During the year, Jeremy spent the following amounts on repairs:Landscaping at Front of Shop (30 October 2019) $ 3,200Repaint Shop (1 March 2020) 10,000Installation of Concrete Ramp (completed on 31 January 2020) 16,000
Note 3Additional annual/personal leave accrued (provided, not paid) on 30 June 2020 was $4,500Note 4Employees’ superannuation of $1,400 was accrued as at 30 June 2020 (not yet paid)LAW6001Assessment 2: Individual Case Study Page1of10Other Information
Stock as at 30/6/19 – at cost
Stock as at 30/6/19 – at market selling value
Stock as at 30/6/20 – at cost
Stock as at 30/6/20 – at market selling value
Debtors (Sales) at 30/6/19
Debtors (Sales) as at 30/6/20
Creditors (Purchases) as at 30/6/19
Creditors (Purchases) as at 30/6/20
Stock taken by Jeremy – at cost
Stock taken by Jeremy – at market selling value
In the 2018/19 tax year Jeremy used market selling value as the basis for valuing his trading stock.Assets held by Jeremy as at 30 June 2020 included:Asset Cost ($) YearAcquiredAdj. Value at30/6/19 ($)EffectiveLifeDepreciationMethodShop Fittings 80,400 2016/17 30,200 10 years Diminishing ValueComputer 4,100 2016/17 2,200 4 years Prime CostEquipment 21,000 28/2/2020 n/a 7 years ?Jeremy has an adequate private hospital insurance.
RequiredThe following Part A and Part B must be submitted as a single file in MS Word format.Part A) Calculate Jeremy’s taxable income for 2019/20 and net tax payable or refundable. Use thetemplate provied below (add more lines if needed). Show all workings of each income & deductionsof calculations and any tax offsets available for Jeremy.Part B) Explain inclusion/exclusion of each income and deductions with reference to relevantavailable cases and section numbers as per ITAA36/ITAA97.End of Assessment 2LAW6001Assessment 2: Individual Case Study Page1of10Part A Template:Jeremy’s taxable income and tax calculations for the year ending 30/6/2020.
Tax on Taxable income
Less non-refundable tax offsets
Add medicare levy
Less refundable tax offsets & tax credits
Net tax payable (refundable)
Learning Rubric: Assessment 2 Case Study (Individual)
Knowledge andunderstanding(technical andtheoretical knowledge)40%
Limited understanding ofrequired concepts andknowledgeKey components of theassignment are notaddressed.
Knowledge orunderstanding of the fieldor discipline.Resembles a recall orsummary of key ideas.Often confuses assertion ofpersonal opinion withinformation substantiatedby evidence from theresearch/course materials.
Thorough knowledge orunderstanding of thefield or discipline/s.Supports personalopinion and informationsubstantiated byevidence from theresearch/coursematerials.Demonstrates a capacityto explain and applyrelevant concepts.
Highly developedunderstanding of the field ordiscipline/s.Discriminates betweenassertion of personal opinionand informationsubstantiated by robustevidence from theresearch/course materialsand extended reading.Well demonstrated capacityto explain and apply relevantconcepts.
A sophisticated understandingof the field or discipline/s.Systematically and criticallydiscriminates betweenassertion of personal opinionand information substantiatedby robust evidence from theresearch/course materials andextended reading.Mastery of concepts andapplication to newsituations/furtherlearning.
Evaluation ofinformation selectedto support the casestudy45%
Limited understanding ofkey concepts required tosupport the case study.Confuses logic andemotion. Informationtaken from reliablesources but without acoherent analysis orsynthesis.Viewpoints of experts aretaken as fact with littlequestioning.
Resembles a recall orsummary of key ideas.Often conflates/confusesassertion of personalopinion with informationsubstantiated by evidencefrom the research/coursematerials.Analysis and evaluation donot reflect expertjudgement, intellectual
Supports personalopinion and informationsubstantiated byevidence from theresearch/coursematerials.Demonstrates a capacityto explain and applyrelevant concepts.Identify logical flaws.
Discriminates betweenassertion of personal opinionand informationsubstantiated by robustevidence from theresearch/course materialsand extended reading.Well demonstrated capacityto explain and apply relevantconcepts.Viewpoint of experts aresubject to questioning.
Systematically and criticallydiscriminates betweenassertion of personal opinionand information substantiatedby robust evidence from theresearch/course materials andextended reading.Information is taken fromsources with a high level ofinterpretation/evaluation to
The response shows acomplete lack ofunderstanding of the case,its context and applicationof tax law in regards todecline in value, tradingstock, GST, accrual basis intaxation in an businessenvironment; and otherinvestment relatedincome & deductions.
independence, rigor andadaptability.The response shows someunderstanding of the case,its context and applicationof tax law in regards todecline in value, tradingstock, GST, accrual basis intaxation in an businessenvironment; and otherinvestment related income& deductions.
Questions viewpoints ofexperts.Shows a goodunderstanding of thecase, its context andapplication of tax law inregards to decline invalue, trading stock, GST,accrual basis in taxationin an businessenvironment; and otherinvestment relatedincome & deductions.
Analysis and evaluationreflect growing judgement,intellectual independence,rigor and adaptability.Shows a great understandingof the case, its context andapplication of tax law inregards to decline in value,trading stock, GST, accrualbasis in taxation in anbusiness environment; andother investment relatedincome & deductions.
develop a comprehensivecritical analysis or synthesis.Identifies gaps in knowledge.Exhibits intellectualindependence, rigor, goodjudgement and adaptability.Shows excellentunderstanding of the case, itscontext and application of taxlaw in regards to decline invalue, trading stock, GST,accrual basis in taxation in anbusiness environment; andother investment relatedincome & deductions.
Effectivecommunicationwhile giving advicesto client5%
Difficult to understand foraudience, no logical/clearstructure, poor flow ofideas, argument lackssupporting evidence.Line of reasoning cannotbe followed in regards todeductions claimed forthe client.
Information, arguments andevidence are presented in away that is not always clearand logical.Line of reasoning is oftendifficult to follow in regardsto deductions claimed forthe client.
Information, argumentsand evidence are wellpresented, mostly clearflow of ideas andarguments.Line of reasoning is easyto follow in regards todeductions claimed forthe client.
Information, arguments andevidence are very wellpresented; the presentation islogical, clear and wellsupported by evidence.Great line of reasoning andanalysis has been performedin regards to deductionsclaimed for the client.
Expertly presented; thepresentation is logical,persuasive, and wellsupported by evidence,demonstrating a clear flow ofideas and arguments.Excellent line of reasoningand detailed analysis has beenperformed in regards todeductions claimed for theclient.
Correct citation of keyresources and evidence10%
Demonstratesinconsistent use of goodquality, credible andrelevant resources tosupport and developideas.
Demonstrates use ofcredible and relevantresources to support anddevelop ideas, but theseare not always explicit orwell developed.
Demonstrates use ofhigh quality, credible andrelevant resources tosupport and developideas.
Demonstrates use of goodquality, credible and relevantresources to support anddevelop arguments andstatements. Shows evidenceof wide scope within the
Demonstrates use of highquality, credible and relevantresources to support anddevelop arguments andposition statements. Showsevidence of wide scope within
Demonstrates no sectionnumbers or incorrectsection numbers perITAA1936 and ITAA1997.
Demonstrates some sectionnumbers per ITAA1936 andITAA1997 with some errors.
Demonstrates somesection numbers perITAA1936 and ITAA1997with a couple of errors.
organisation for sourcingevidence.Demonstrates more thanenough correct sectionnumbers per ITAA1936 andITAA1997.
and without the organisationfor sourcing evidence.Demonstrates sufficientcorrect section numbers perITAA1936 and ITAA1997.
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