Under ITAA 1997 u/s 8-1 the cost of moving is allowed for the process of deduction because this is regarded as an expense in order to move the assets of capital from the firm. In the recent future, the firm for the process of capital revenue has incurred the capital expenditure. As opined by Becker, Reimer & Rust (2015), the moving cost of the machinery is denoted as the carrying cost in terms of a domestic way and the firm is in need of investments for the future. As per the ITAA 1997, u/s 8-1 the expenses can simply be deducted from the company's total revenue. This process has been incurred for the earning in the future. The moving cost of machinery in the firm is allowed for the process of deduction from the net review of u/s 8-1 of ITAA 1997.
In the ongoing business, the firm suffers the evaluation cost. Hence, the act in terms of revaluating assets is noted as the cost, which is suffered by the firm in order to showcase the business value. As per this act, the total amount can be deducted from the income of firm which is incurred in terms of carrying out the purpose for the business in future. As asserted by Braunerhjelm & Eklund (2014), the cost, which is, denoted as the evaluating assets while suffering for carrying out the purpose for the business thus, 8-1 of ITAA 1997 the cost that has been suffered from companies revaluating assets is deducted from the firm income.
In the future firm is incurring in terms of having the investment as well as carrying out the cost from the firms in a domestic nature. While opposing for the petition of liquidation the cost is incurred as the legal charge for the firm. The petition for the liquidation can be incurred in terms of the legal charges of the assurance conducted by the firms on a regular basis. Hence, it is observed that the cost is needed for winding the company and it is not the domestic cost while carrying out for the trade of the company in the future. As per Carney, Gedajlovic & Strike (2014), under the 8-1 of ITAA 1997 the cost while legal charging in terms of opposing the petition of liquidation cannot be deducted from the firm's income.
The cost that has been incurred for the legal expenses in regards to the business solicitor fees in terms of discharging the firm's solicitors, mortgage as well as the providing legal advice while tackling the clients in the business. As opined by Friedman (2013), the cost that is used for convincing is under one head in the expenses of domestic incurring for the continuous activities of the business. Hence, this type of cost is allowed for the process of deduction under the section of 8-1 of ITAA 1997. Thus, the cost can be incurred in terms of decreasing the issue created by the liability from the firm's head.
As per the ITAA u/s 1-8, there is a responsibility for the trading in terms of the banking institution for providing tax that is needed to be collected by the government. The tax that has been collected is calculated on the basis of input tax from the output tax in terms of the trading body or the bank. In the opinion of Kaplan & Nadler (2015), while providing the services to the clients of the bank, Big Bank Ltd uses some of the percentages of tax on the given services that is termed as the input tax. In addition to that, the bank pay tax in the form of output tax while having the loan or incurring the indirect expenses such as advertising expenses. When it comes to the payment of GST the total sum of input tax is deduced from the total sums of bank output tax (austlii.edu.au 2017).
From the given case study it can be seen that Big Bank has incurred a total sum of $ 1,650,000 (GST inclusive). On the other hand, the total expense of the advertisement is $ 1,100,00 that includes the advertisement for television, campaign and in printing such as the radio with the medium of wireless advertisements. The Big Bank Ltd has more than 50 branches along with that various call centres as well as a 10-storey head office. Hence, total expenses which are incurred of $ 2,650,000 (1,650,000 + $ 1,100,000), the tax Practitioner Board rate of input tax has immense importance for Big Bank including the rate of tax which is equal to 10% of the essential service of advertising. It can be seen that the advertising of Big Bank includes all the services for increasing the trade in the bank. Hence, the output tax levied in terms of the amount of bank to $ 165,000 ($ 1,650,000 * 10%). Moreover, in the recent years, the bank has been issued for invoice expense of advertising form the overusing amount of a consultant to $ 1,650,000. In addition to that, it is seen that the amount that has been from the recent year in the input tax credited amount of $ 165,000 ( $ 1,650,000 - $ 1,485,00) after the amount deducted from the prepaid tax pay amount of $ 1,485,000. Moreover, the Big Bank Home and the Big Bank Ltd both of them had launched a brand new product which is related to the firm insurance in a partnership mode that includes the 2% of the net profit and there can be a loss while transferring of the book of the Big Bank Home. Hence, the amount of the input tax credit to ($ 1,485,000 - 2%) to that of the amount of $ 1,455,300 (approx). The tax amount that is gathered while calculating will be credited to the Big Bank account because the money is paid to the firm on the basis of prepaid and this is known as the forming of the assets of a company. Thus, the Big Bank can claim the issue with the advertising consultation.
In deriving the interest income the expenses are incurred 60
While driving the rental income the expenses are incurred from the United Kingdom with the help of United Kingdom regulation as well as the IITA including the individual's income tax.500
For the employment income of Australia, the expenses are driving based on the Australian regulation and IITA of individual’s income tax.4,000
The interest that is the deduction of debt has incurred from the income of dividend [from the income of assessable the interest can be deducted because it is not received from the Australian government's.]140
In terms of medical expenses (It is assumed that from the cosmetic surgery of Angelo the expenses are not incurred and it mostly included the individual expenses.) 5,000
In the United States, the employment income is incurred with the regulation of United States as well as the IITA regarding the individual's' income tax.900
Gift to the deducted recipients of gift [ under the IITA the gift is required to be deducted from the individual annual income and if the gift amount on a maximum of $ 97.22(AUD)]400
United Kingdom dividend income [ under IITA guideline the treatment is dividend is received from the other company in outside Australia is required to be deducted from the individual's assessable income like the income which is regarded as the other source of income. In addition to that, it includes the individual's capital revenue and the results will be no interest charged from the Australian government on Angelo.] (not calculated)120
United Kingdom rental income [ according to the Australian Taxation Board, individual's rental income on the overseas basis is needed to be included at the foreign tax offset in terms of an individual is required to be deducted from the income assessable of an individual because this income is attached with the amount of the related resource debt arrangements of the rental property of an individual in the overseas]600
United States employment income [ as per the tax slab of IFA of the USA the tax income is payable by an individual that includes the income which is earned from the outside region of the Australian geographical boundary]3,600
United Kingdom interest income [ according to the IITA guideline the interests treatments on the basis of Australian government is not chargeable of nay extra tax of the desired income of UK because this results in the double taxation on the earned amount] (not calculated)80
Total foreign tax paid4,400
Net income in hand52,800
1 In the cosmetic surgery of Angelo it can be assumed that the medical expenses not incurred (that includes the cosmetic surgery and other plastic surgery) along with that the expenses are mostly bored in terms of the fitness of Angelo.
2 It is assumed that Angelo has paid all the interest income from the United Kingdom from the country where the revenues are earned.
1. In the net earnings of for the calculation of investments of both the partners are not included and the dividend is franked of up to 60% over the real company share. In the calculations, only the initial amounts of the interest that are received through interest has been calculated such as [21000* (100/160)]. This amount is the only amount that is earned from the dividend. In addition to that, the firm has used this in terms of getting an agreement that is like 60% of the share of market price and it is included in revenue from the capital gains from both partners.
2. In the year 2009, there is a capital gain of $ 15000 firm both the partners, which are disposed of, in the prior stage of 2009. The company has an accrued expense, which is disposed of, and it signifies the outstanding amount of firm in 2009. In addition to that, it is reflected in the firm balance sheet as well as deducted from the firm capital gain.
3. From the case scenario, it can be seen that Johnny has included expenses that are related with personal travelling. Both the partners had made an agreement that personal travelling is related with the personal work and it is not deducted from the firm gross revenue. Hence, if Johnny withdraws a certain amount then that will be reflected in Johnny's debit account along with that it is going to be deducted from Johnny's capital of balance sheet.
4. The staff salaries include the salary of Johnny's son who used to wash the car and this comes under the firm's expenses. In addition to that, the same treatment is noted for the firm commission paid to them.
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