Question 2

Jamie is a real estate agent working for Houses R Us real estate. As part of his employment contract, Jamie receives a base salary of $50,000 per annum plus 10% of the agencys commission on sold properties where he has had a direct connection with the sale. He is also provided with a car, a Toyota Kluger costing $48,000. He is not required to contribute to the running costs of the car which total $13,500 per year and is allowed to use the car outside of work hours and on weekends.

Jamie's salary package also includes a laptop which cost $2,300 and a mobile phone costing $1,200 per year. His employer also reimburses his annual professional subscription of $550 and provides him with an entertainment allowance of $2,000 per year.

Jamie was also lucky enough to achieve the highest sales for the previous six month period and was rewarded with a high tech home entertainment system worth $4,800.

Houses R Us also offer their staff loans of up to $100,000 towards purchasing their own house at a rate of 4% per annum. Jamie is considering taking up this offer to purchase his first home.

Required Advise Jamie and Houses R Us of the taxation and FBT consequences of these transactions. You are not required to calculate any FBT liability.(15 marks)

Rationale

This assessment task will assess the following learning outcomes:

be able to identify and explain the rules of law relating to taxation law topics covered in the subject.

be able demonstrate a capacity to engage in legal research.

be able to use legal research skills to apply the law to legal problems relating to taxation so as to reach a solution.

be able to analyse legal rules so as to differentiate between possible outcomes to the legal issues arising from novel fact situations.