Calculate the assessable - deductible amount for each of


During the year ended 30 June 2011, Paul Stiffneck, an Australian resident, entered into the following transactions:

1. Paul subdivided his home and sold his backyard (which comprised grass and gardens solely). He acquired his home in August 2009 for $1,000,000. He sold his backyard for $300,000. At the time, the entire block (including the house and the backyard) was worth $1,500,000, and the cost reasonably attributable to the backyard was $200,000.

2. Paul has a computer retail business which he operates as a sole proprietor and works in part time. He took a computer, which cost $5,000, out of stock and used it for personal enjoyment from then on. The computer retailed at $7,000.

3. As part of his employment duties as a stockbroker, Paul travelled from Sydney to Melbourne on 25 June 2011 to visit a client and paid $50 for his lunch (including a glass of wine and a tasty pasta) at a restaurant prior to the client meeting. Because he did not seek prior approval, he was not reimbursed by his employer for his lunch.

4. As part of his employment duties as a stockbroker, Paul is required to subsidise his employer whenever one of his clients defaults on their payment. The ‘fine' is equal to any commission Paul may have received in respect of that client. This is designed to ensure that Paul does an appropriate amount of due diligence before accepting work from a client. After one of his clients went into administration in April 2011, Paul was ‘fined' $10,000 by his employer.

Required

Calculate the assessable/deductible amount for each of the above transactions. Show your workings. Briefly explain your answer and cite the relevant references (i.e. cases and/or section references).

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Taxation: Calculate the assessable - deductible amount for each of
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