Taxation Law Case Studies Based Assessment

Your Task

Analyse client information outlined in the three different case studies below and present the findings in three Statements of Advice (approximately 2,000 words).

1) You are required to provide advice to partners at J & D partners.

2) You are required to provide recommendations and tax calculations to Joanne Tran regarding the taxation implications and tax payable by the trustee for James and Lisa, the beneficiaries.

3) You are required to calculate the franking account and tax payable by Haufmann Pty Ltd.

For each question you are expected to:

1) identify the facts and issues for each case

2) apply the relevant legislation and/or case law.

Learning Objectives

After completing this Individual Assignment, you will be able to:

1) Research information about each question using tax cases and tax legislation. 2) Identify the main issues and make recommendations to clients for each case. 3) Calculate taxes for individuals and a company.

Assessment Instructions

Statement of Advice 1 Partnership net income & distribution

Your client Jack and Dustin at J & D Partners have attended your office to have their 2022-year tax return prepared. Jack and Dustin are equal partners in J & D Partners partnership. Both have contributed equal amounts of capital ($50,000 each). Jack is a silent partner while Dustin spends most of the time working in the partnership business.In addition to the annual salary to Dustin, the partnership agreement provides the following: Jack and Dustin will each receive interest at the rate of 15% per annum on their capital contribution.

• Dustin will receive a salary of $35,000 per annum for the management of the business, and $4,000 per annum will be paid by the business into a superannuation fund for Jack.
• All residual profits and losses will be shared equally between Jack and Dustin.

The bookkeeper has provided the following information in relation to the partnership for the 2021/22 tax year:

Other Information

1) Capital gain on land: the land was purchased 6 years ago for $80,000 and sold for $200,000

2) A car was leased for the business and this car has been used solely by Dustin, who has used the car 90% for business and 10% for private use.

Required

Advise Jack and Dustin what is the ITAA36 s90 net income of the partnership and each partners taxable income for 2022. You must provide all workings (details) to determine the partnership net income as well as individual partners assessable income.

Statement of Advice 2 Advice on Trust income and distributions

Your client Joanne Tran has attended your office to have his 2022-year tax return prepared. Joanne is the trustee of an Australian resident trust estate created by a Trust Deed. She created the trust for the benefit of her sons, James aged 18 years and Lisa aged 16 years. They are both residents of Australia.

Joanne provided the following information regarding the trust for the 2021/22 income tax year.

• Net rental income from various investment $57,000
• Fully franked dividend received $4,300

Other information

James stays home with Joanne and does not intend to go to university and received a job seeker payment of $8,890 from Centrelink during 2021/22 tax year. Lisa is a full-time high school student and earned $4,000 working at a local restaurant during school holidays.

Required

Advise Joanne the taxation implications (base tax payable by the trustee and/or each beneficiary) if she distributes the trust net income to each beneficiary at 50?ch. Do not need to include Medicare levy or any tax offsets.

Statement of Advice 3 - Calculate the franking account and tax payable by Haufmann Pty Ltd.

Jerry Haufmann is a director of Haufmann Pty Ltd, an Australian resident private company, with a corporate tax rate for imputation purposes for the 2021/22 income year of 25%.

Other information

(1) Benchmark franking percentage for Haufmann Pty Ltd is 100%

(2) Haufmann Pty Ltds final PAYG instalment for June quarter 2022 totalled $1,300 and this will be paid by 25 August 2022.

(3) Haufmann Pty Ltd has a taxable income of $27,000 for 2021/22.

Required

1) Prepare Haufmann Pty Ltds franking account for the 2021/22 tax year and explain/advise any consequences arising from the franking account balance at 30 June 2022. You must include relevant section numbers

2) Calculate net tax payable (refundable) for the company.

Important Study Information

Academic Integrity Policy

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• What is academic integrity and misconduct?
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• What are the late penalties?
• How can I improve my grade?

Click here for answers to these questions:

http://www.kbs.edu.au/current-students/student-policies/.

Study Assistance

Students may seek study assistance from their local Academic Learning Advisor .