Presentation: Generally each question should have about 250 -Words.
In each problem
1) Identify the key issue that requires an answer including the relevant ITAA section
2) Discuss the issue and the relevant law
3) Form a conclusion
Required:
Please discuss the following six questions
Question one
Dr Jean is a self employed medical practitioner with her own practice in Hawthorn. Dr Jean employees three casual staff who work as receptionists in her office.
She also employees one qualified nurse on full time basis.
The following information relates to her medical business for the year ending 30 June 2018.
$
Cash received from patients during the year ending 30 June 2018 400,000
Reimbursements from Medicare received during the year 50,000
Invoices sent to patients during the year totalled 425,000
Unpaid patient invoices at the 30 June 2017 25,000
Salaries paid to the casual staff during the year totalled 75,000
Salary paid to the nurse totalled 60,000
Other expenses incurred (all deductible) 55,000
Required:
Advise Dr Jean, giving reasons, what her taxable income is for the year ending 30 June 2018. You are not required to calculate her income tax liability.
Question two
Noah, an architect, issued an invoice to his client for services rendered totalling $5,000. The client paid Noah by giving him a non - transferable travel voucher valued at $4,700 entitling him and his family to a free holiday in New Zealand.
Required:
Discuss the income tax implications for Noah of being paid for his work with a non transferable holiday voucher.
Question three
Mary is a talented employee in a public accounting firm who has completed two years of her university accounting degree with a further one year required to complete her studies.
Her employer has offered to grant Mary a "scholarship" to attend university as a full time student for her final year. On completion of her studies Mary will rejoin the firm as a full time employee. The scholarship is 50% of her current salary.
Required:
Discuss the income tax implications (if any) for Mary if she accepts the scholarship.
Question four
Peter sold the goodwill of his accounting practice in Hawthorn for $400,000 plus he received a further $40,000 when he signed an agreement not to open another accounting practice within 10 kilometres of the Hawthorn business. He commenced his Hawthorn accounting practice 10 years ago.
Required:
Discuss the income tax implications for Peter of the receipt of the $400,000 and the $40,000.
Ignore concessions for small businesses
Question five
Emma is an enthusiastic user of an on line selling site and frequently purchases small household from friends and neighbours and then sells them using the on line site. She usually makes a small profit on each sale.
Required:
Outline the major factors that would indicate whether Emma is carrying a business and thus deriving assessable income or is simply pursuing a hobby and the profits would not be assessable income.
Question six
A surf life saver, who was on duty, rescued a drowning child from the sea. A greatful parent of the child gave the life saver a watch valued at $500. Surf life savers at this club are not paid for being on duty but do the work for the pleasure of helping swimmers in difficulties.
Required:
Advise the surf lifesaver if the gift she received from the parent is assessable income.