On 31 July 2018, Rawson Pty Ltd arranged for a new electric stove to be installed in one of its residential investment properties (Sylvania apartment). The old stove was 15 years old and the tenants advised that it no longer worked properly. It was dumped at the local council's recycling station. It had an "adjustable value" of $70. The purchase cost of the new stove was $1,500. The installation cost (by a registered electrician) was $250. Like other stoves, it was installed in such a way that it was designed to become a permanent part of the premises.

Advise Rawson Pty Ltd on the income tax implications of the above. Fully explain your advice by reference to tax legislation, tax cases, and tax principles and provide relevant law cases in accordance with Australian Tax Law.

Answer rating: 100% (QA)

In Australia when it comes to residential investment properties and the replacement of assets such as stoves there are specific income tax rules and p... View the full answer