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HA3042 tax Law Tutorial 8 Reading: Coleman, C. et al, Principles of Taxation Law 2012, Thomson Reuters -Chapters 16 & 17 Suggested Solutions: move 16.4 Computer Consultants Pty Ltd: 1. render for long service bestow is non deductible, only the quantity actually stipendiary: s 26-10 of ITAA 1997. 2. Maintenance fee over a 12-month period; outgo non over 12 months, so s 82KZL of ITAA 1936 applies and the amount amount is deductible. 3. Provision for bad debts is not deductible, only the amount written off after exertion has been taken to reclaim the amount through debt collectors or lawful action: s 25-35 of ITAA 1997. Question 16.5 According to the legal formula established in Hendersons sequel, only small reviewer linees ar entitled to number on a cash base. Medium to large businesses are required to bank occupation on an accruals basis. This principle is only erect in the familiar law and some medium-sized businesses wh itethorn account on a cash basis if appropriate for their pillowcase of business ie sales on credit. A business with a turnover rate of $20 million should account for its income on an accruals basis. Question 16.8 If history on a cash basis then it would not be derived in the current pecuniary year.

However, s 6-5(4) whitethorn catch the income as the taxpayer was in a position to manage with the income. Part IVA, the tax avoidance provisions, whitethorn also apply. If account on an accruals basis it would make no difference as the income is derived when the invoice is sent to the client, not when it is paid by the client. Question 17.2 S! hares can be traffic deport (Investment & Merchant pay (1971)) but not in this case as Lex holds the shares with a long-term investment purpose and not for sale or exchange in the ordinary line of work of his business. insure Investment & Merchant Finance (1971) 2 ATR 361 at 373: nevertheless where the owner of shares is a dealer in shares, share may show that particular shares are not trading computer memory....If you want to get a full essay, order it on our website: OrderCustomPaper.com

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