Problem
Maddie McConnell is a full-time Masters by Research Occupational Therapy student at a South Australian university who also owns and operates a business named Yoga Bear as a sole trader to provide yoga classes to people in the Adelaide metropolitan area. Maddie conducts her classes in local parks near where she lives, but due to the COVID-19 pandemic, Maddie was forced to offer some of her classes online. After lockdowns were lifted, Maddie returned to conducting classes in parks, but she maintained an online presence to provide flexibility for her students.
Students pay $60 for each 30-minute yoga class in allotments of 10 in advance, but Maddie offers refunds to students who cannot complete their lessons due to illness or injury if they can provide a medical certificate as supporting evidence. Participation requires students to log in to an online class or arrive at the park at one of the scheduled times. For the year ended 30 June 2022, Maddie received $25,000 in advance of yoga lessons being provided while the value of classes paid for but yet to be provided by Maddie on 30 June 2022 totalled $700.
Maddie also receives a university scholarship to study her Masters. For the year ended 30 June 2022, she received $34,000 in scholarship payments.
Calculate Maddie's assessable income for the year ended 30 June 2022. This is a tax law exercise, justify your answers with reasonably argued positions using the 'cite, describe, apply' approach where appropriate. Assume that Maddie is an Australian tax resident individual taxpayer and that she is in the business of providing yoga lessons. This means that her tax residency status and whether her yoga classes activity is a business are not issues that need to be discussed