LAW5230 Assignment: Semester 2 2015

Due date: 9TH October 2015
Value: 34% (It is marked out of 100 and then out of 34)

Word Limit: Approximately 2500 words (excluding calculations). Allocate
This assignment consists of three (3) case studies. You must complete all the case studies and all parts of each case study.

Case Study one
Assessable Income
Which, if any, of the following give rise to assessable income? (Give reasons with your answer and where possible support your answer with case law):
1. Joe is a doctor and agrees to swap medical work valued at $1000 with Simone (who runs a camera shop) for a camera with a market value of $900 (but only cost Simone $600.)
2. A car valued at $20,000 given as a prize to Sally who is a customer of a bank. The competition was open to all those who were able to maintain a minimum balance of $10,000 for the year.
3. Sarah arranges to have a builder help her on weekends to erect her extension on her home. This is done on the basis that he can have a caravan (which cost Sarah, $12,000 on 1st January 2007) when the work is done. Assume the value of the builders work is $11,000 and the caravan has a market price of $13,000 when she hands it over on 1st January in the current income year.
4. Charmaine sells the story of her life on the run with her bank robber ex-husband Ned Kelly, to her local paper, “The Daily Bugle,” for $25,000.

Case Study two
Deductions
Baz Baxter always wanted be a pilot but for the moment works as an air traffic controller at the local airport and is employed by the Department of Aviation. Baz holds a pilot’s licence and during the current income year incurs $1500 expenses connected to keeping up flying hours necessary for the retention of his licence and $2,000 in obtaining a higher grade of licence.
There is no statutory or contractual requirement on controllers to obtain a flying licence and the holding of a pilot’s licence and ongoing flight training are not essential prerequisites for promotion. However the Department of Aviation acknowledges that flying qualifications and experience help controllers to keep up to date with developments in their field and increase their knowledge and ability in their job.
Advise Baz whether he will be able to obtain a deduction for any or all of these expenses. In your answer refer to relevant case law.

Case study three
Capital gains tax
1. Brett borrowed $100,000 in the current income year to buy a block of land in his own name, intending to build a house for himself and his family. Before starting to build, he accepted an offer for the land of 250,000. Sale took place in May of the same income year. Interest expense was $2,000. Is there any assessable capital gain?

2. Cindy received an insurance payment of $40,000 for the loss of her BMW Sports car. The payment was received on 30th December in the current income year and the loss occurred on 29th December in the previous income year. The car was originally purchased for $24,000 on 1st May 1987 and was not used for income producing purposes. What are the capital gains implications?

3. Why are collectables treated separately from personal use assets in identifying CGT assets?

LAW3130 – Revenue Law and Practice
Semester 2, 2015
Assignment Marking Criteria Sheet
Case Study 1 – Assessable Income Issues
Little attempt
F
C
B
A
HD
Identification of legal issues, legislation and case law
Overall the student has identified the relevant assessable income issues, legislation and where appropriate case law and rulings.
0
0.5
1.5
2
2.5
3
Application

Demonstrated level of understanding of the residency & source issues through the application of the identified law.

1

2

5

6

7

9

Demonstrated level of understanding of the derivation/timing issues through the application of the identified law.

1

2

5

6

7

9

Demonstrated level of understanding of the ordinary income issues through the application of the identified law.

1

2

5

6

7

9

Conclusions

Overall, the student has drawn appropriate and valid conclusions after applying the law.
0
0.5
1.5
2
2.5
3

Total out of 33

Case Study 2 – Deduction Issues Little attempt
F
C
B
A
HD
Identification of legal issues, legislation and
case law
Overall the student has identified the deduction issues, legislation and where appropriate case law and rulings.
0
0.5
1.5
2
2.5
3
Application
Demonstrated level of understanding of the general deduction issues through the application of the identified law. (Dining and Legal Fees)
1
2
5
6
7
9

Demonstrated level of understanding of the general deduction issues through the application of the identified law. (Conference)

1

2

5

6

7

9

Demonstrated level of understanding of the repair issues through the application of the identified law. (Maintenance)

1

2

5

6

7

9
Conclusions
Overall, the student has drawn appropriate and valid conclusions after applying the law.
0
0.5
1.5
2
2.5
3

Total out of 33
Case Study 3 – Capital Gains Tax Issues Little attempt
F
C
B
A
HD
Identification of legal issues, legislation and
case law
Overall the student has identified the relevant capital gains tax issues, legislation and where appropriate case law and rulings.
0
0.5
1.5
2
2.5
3
Application
Demonstrated level of understanding of the specific capital gains tax issues in relation to the sale of Devi’s shares.
1
3
4
5
6
7
Demonstrated level of understanding of the specific capital gains tax issues in relation to the sale of Devi’s house.
1
3
4
5
6
7
Demonstrated level of understanding of the specific capital gains tax issues in relation to the sale of Devi’s caravan.
0
1
2
2.5
3.5
4
Conclusions
Overall, the student has drawn appropriate and valid conclusions after applying the law. (Calculation & explanation of Net Capital Gain)
0
0.5
1.5
2
2.5
3

Total out of 24

General Criteria Little attempt
F
C
B
A
HD
Overall clarity of expression, logical flow of ideas, use of grammar and punctuation.
1
3
4
5
6
7
Ability to use chosen referencing method appropriately and correctly.
0
1
1.5
2
2.5
3
Total out of 10

TOTAL (out of 100)
Description of Performance Standards;
HD – the student has shown a very high level of demonstrated ability in relation to the stated criteria by covering
all valid points in a clear and succinct manner. The student may have also demonstrated an ability to think beyond the facts and recognise the broader implications of the facts, missing facts or alternate arguments.

A – The student has show a high level of demonstrated ability in relation to the stated criteria by either covering all valid points or by covering the majority of valid points in a clear and succinct manner. The student may have very briefly or occasionally shown ability at the HD level.

B – The student has show a good level of demonstrated ability in relation to the stated criteria by covering most of the valid points. The student may have made some minor incorrect statements or missed some minor points.

C – The student has show a satisfactory level of demonstrated ability in relation to the stated criteria by covering the main valid points. The student may have made a number of minor incorrect statements but did make incorrect statements in relation to major points.
F – The student has not shown a satisfactory level of demonstrated ability in relation to the stated criteria by missing some main points or by making incorrect statements in relation to major points.

Little Attempt – The student has not addressed or attempted to address this criterion.
END OF ASSIGNMENT
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