Case Study One Part A You are currently working as a graduate accountant and are provided with the following information from a client. The client, Joe, has the following income and expenses for the financial year ended 30 June 2019. Joe is employed as a manager of operations at a local transport company. In addition to his employment Joe also operates a market stall selling wood carvings on the weekend. Income 45,000 1,000 5.000 125.000 5.000 . 10,000 35,000 25,000 1.000 Sales of wood carvings from the market stall An anniversary gift from his employer for Joe's 10 wedding anniversary Bonus received from his employer for successful completion of large project Salary received from his employer (including PAYG Withholding of $22,000) Interest on Bank Deposits Joe gambles on the horses and during the year had won $10,000 on betting Sale of his personal motor vehicle (he brought the vehicle for $15,000) Sale of shares (he brought the shares 13 months ago for $10,000) Received Manager of the year award from the Institute of Managers Expenses $ 2.000 5,000 800 1,500 12,000 400 200 3,200 900 1.000 1,000 Rent on market stall for his business Purchase of wood for carvings, Joe estimates in cost he has $2,000 in wood as at 30 June 2019 as stock on hand and advises that as at 1 July 2018 his wood stock at cost was $3,000. Joe purchased steel capped work boots for $500, protective sunglasses for $220. New jeans for $80 (which he also wears on the weekend) Bookkeeping fees for the market stall business Purchase of new carving tools for the market stall business Cost of meals and entertainment that his employer did not reimburse Train fares for travel to and from work Rates on family home Electricity for family home Advertising packaging for market stall business Purchase new table and counter for market stall Joe does not have any children. Joe does have private health insurance. Joe also advises you that he had carried forward tax losses from last year of $2,000 relating to his market stall. In addition to the above Joe advises he does work from home as he attends to emails late night after dinner at least 4 nights a week. Required: Determine which income and Expenses are assessable income or allowable deductions Note you will need to cite legislative references, case law and tax rulings as applicable. Emphasis is on providing substantiation for you reasoning to include as assessable income or allowable deduction. Also refer to the relevant item number on the 2019 tax return where the amount would be disclosed, i.e. (interest income is item 10). An Example format is provided below. Assume Joe is a resident for Australian taxation purposes, calculate his tax liability including any tax offsets and levies. EXAMPLE FORMAT Income Assessable Particulars Legislation, Case law, Rulings, Reasoning Item -2019 Tax Return YIN Expenses Deductible Particulars Legislation, Case law, Rulings, Reasoning Item -2019 Tax Return YAN Part B During your meeting with Joe, he advises that his employer has offered him a position for 3 years in Thailand. Joe seeks your advice on residence issues for Australian taxations purposes. In particular Joe wants to understand impact on any Non Australian assets he owns (Joe currently has overseas shares valued at $150,000 and a averseas property in Singapore valued at $1.5million). Joe also wants to understand what tests will be applied to determine his residency. (Part A 20 marks) (Part B 5 marks) Word Count: 1,000 - 2000 words Case Study One Part A You are currently working as a graduate accountant and are provided with the following information from a client. The client, Joe, has the following income and expenses for the financial year ended 30 June 2019. Joe is employed as a manager of operations at a local transport company. In addition to his employment Joe also operates a market stall selling wood carvings on the weekend. Income 45,000 1,000 5.000 125.000 5.000 . 10,000 35,000 25,000 1.000 Sales of wood carvings from the market stall An anniversary gift from his employer for Joe's 10 wedding anniversary Bonus received from his employer for successful completion of large project Salary received from his employer (including PAYG Withholding of $22,000) Interest on Bank Deposits Joe gambles on the horses and during the year had won $10,000 on betting Sale of his personal motor vehicle (he brought the vehicle for $15,000) Sale of shares (he brought the shares 13 months ago for $10,000) Received Manager of the year award from the Institute of Managers Expenses $ 2.000 5,000 800 1,500 12,000 400 200 3,200 900 1.000 1,000 Rent on market stall for his business Purchase of wood for carvings, Joe estimates in cost he has $2,000 in wood as at 30 June 2019 as stock on hand and advises that as at 1 July 2018 his wood stock at cost was $3,000. Joe purchased steel capped work boots for $500, protective sunglasses for $220. New jeans for $80 (which he also wears on the weekend) Bookkeeping fees for the market stall business Purchase of new carving tools for the market stall business Cost of meals and entertainment that his employer did not reimburse Train fares for travel to and from work Rates on family home Electricity for family home Advertising packaging for market stall business Purchase new table and counter for market stall Joe does not have any children. Joe does have private health insurance. Joe also advises you that he had carried forward tax losses from last year of $2,000 relating to his market stall. In addition to the above Joe advises he does work from home as he attends to emails late night after dinner at least 4 nights a week. Required: Determine which income and Expenses are assessable income or allowable deductions Note you will need to cite legislative references, case law and tax rulings as applicable. Emphasis is on providing substantiation for you reasoning to include as assessable income or allowable deduction. Also refer to the relevant item number on the 2019 tax return where the amount would be disclosed, i.e. (interest income is item 10). An Example format is provided below. Assume Joe is a resident for Australian taxation purposes, calculate his tax liability including any tax offsets and levies. EXAMPLE FORMAT Income Assessable Particulars Legislation, Case law, Rulings, Reasoning Item -2019 Tax Return YIN Expenses Deductible Particulars Legislation, Case law, Rulings, Reasoning Item -2019 Tax Return YAN Part B During your meeting with Joe, he advises that his employer has offered him a position for 3 years in Thailand. Joe seeks your advice on residence issues for Australian taxations purposes. In particular Joe wants to understand impact on any Non Australian assets he owns (Joe currently has overseas shares valued at $150,000 and a averseas property in Singapore valued at $1.5million). Joe also wants to understand what tests will be applied to determine his residency. (Part A 20 marks) (Part B 5 marks) Word Count: 1,000 - 2000 words