Part A - Case Study - Marks 20 600.00 Taxi fares for travel from her office to properties being sold by the firm she works for You are currently working as a graduate accountant and are provided with the following information from a client. The client, Kim, has the following income and expenses for the financial year ended 30 150.00 Taxi fares for travel from home to her office. Kim advises that she sometimes June 2022. Kim is employed as a real estate agent for a large Real Estate firm. Kim also operates a works from home at the kitchen table of her small one-bedroom apartment. Yoga class every Saturday (Kim hires a small room for her class from a Health Retreat Spa). 730.00 Membership fees, $530 relating to membership of institute of real estate agents Income and $200 relating to membership fee for travel world society (Kim one day wishes to be a travel agent). 50.00 Kim's employer operates an employee of the month policy where staff vote for the employee of the month. Kim wins the award for June 2022. 1,000.00 Electricity cost for her home 10,000.00 Bonus received from her employer for successful completion of a large sale 1,500.00 Telephone expenses, Kim estimates 40% of the cost relates to work and her employer does not reimburse this cost. 100,000.00 Salary received from her employer (including PAYG Withholding of $20,000) 5,000.00 Purchases of mats and other equipment for yoga classes. 7,500.00 1,500.00 Kim has a $30,000 invested in a 5 year savings bond (acquired 1 July 2021) Kim travels to Sweden to attend a 1 week course on yoga instructing. While in which ears 5% interest each year but is paid as a lump sum at the end of the Europe Kim spends 4 weeks on holiday to travel Europe and see the sights. The term of the bond (5 years). i.e., $1,500 for term of bond course cost $2,000, the airline ticket was $2,500 and $3,000 was spent on accommodation for entire 5 weeks. 6,000.00 Kim wins $6,000 on a rare day at the horse races. 15,000.00 Income from Yoga classes. Kim is not registered for GST but does have an ABN. Kim has no children and does not have private health insurance. 1,500.00 Received an award from the Institute of Real Estate Agents for her contribution to the profession. To receive the award Kim was nominated by her peers and had to attend the Manager's year end function. Required: 300,000 During the 30 June 2022 financial year Kim sold a vacant block of land, the Determine which Income and Expenses are assessable income or allowable deductions. contract was dated 25th June 2022 and the property settled on the 28th July 2022. Note you will need to cite legislative references, case law and tax rulings as applicable. Emphasis is on providing substantiation for your reasoning to include as assessable income Kim originally brought the block of land in May 1991 for $150,000, in June 2020 or allowable deduction. she subdivided the block of land into two lots. At the time of subdivision each lot had a market value of $100,000. Assume Kim is a resident for Australian taxation purposes, calculate her tax liability including any tax offsets and levies Kim only sold one of the blocks for $300,000 on the 25" June 2022 and she still owns the other block. 2,000 Kim sold a rare sculpture for $2,000 during the 30 June 2022 financial year. Kim had purchased the sculpture for $200 two years earlier. Part B - Advice - Marks 10 10,000.00 Kim's employer approaches her to been involved in an expansion of the business There has been much debate around the relevant tests for residency in relation to Australian into rental properties. The employer advises it is highly confidential and asks Kim taxpayers. This debate has led to numerous recent litigations with respect to whether a taxpayer is or to sign a restrictive covenant that she will not reveal information to a competitor or is not a resident for Australian taxation purposes. work for a competitor within two years of leaving her employment. Kim signs contract and accepts the $10,000.00 payment. Required: . Discuss current legislative provisions with respect to the test of residency for Australian Expenses Taxation purposes. With respect to recent developments (proposed test by the Board of Taxation) discuss implications and propose a residency test that you believe will work in a modern society. 800.00 Kim purchased safety work boots for $250 and protective glasses for $250 as she sometimes needs to attend commercial properties for her work. In addition to this Kim purchased a new evening dress for $300 (which she wore to the Institute of Real Estate Agents dinner) 200.00 Cost of meals and entertainment that her employer reimbursed her for College of Business and Law College of Business and Law