Discuss if the following items are deductible or not. Please reference to the statutory laws and case laws if applicable. 

(a) Mal purchases various law books for $800 in the income year. He is employed as a lawyer and uses the books as a resource in his current position 

(b) Glenn purchases $840 of paints and supplies. He uses these to paint portraits. He painted 6 portraits during the year for friends and relatives but gave them as gifts rather than selling them

(c) Ryan has purchased $2,700 of lottery and keno tickets during the 2019/2020 income year. On 20 June 2020, he won $50,000 from one of the lotteries that he had purchased tickets in 

(d) Rumpole is a scientist. He uses his own car to travel to various locations to conduct experiments. He acquired the car on 1 October 2016 for $60,000. 

The acquisition cost was funded entirely by a loan at an interest rate of 15%. He has determined that the depreciation deduction on the car would be $2,300 for the year. In addition, Rumpole incurred the following expenses during the year: 

➢ Registration and insurance = $2,000;

➢ Repairs and maintenance = $1,000; 

➢ Oil and fuel costs = $1,500. 

For the period 1 October 2016 to 30 June 2017, Rumpole estimates that the car travelled a total of 15,000 kilometres, 12,000 of which were for business purposes. You may assume that Rumpole has maintained all necessary records and a logbook. 

Calculate Rumpole's deduction for car expenses under the “Log Book” method in Div 28 of ITAA 1997. 

Assume that depreciation has been adjusted for part year use and the impact of the car limit.

Answer rating: 100% (QA)

ANSWER a Mals purchase of law books is deductible because it is a workrelated expense b Glenns purch... View the full answer