Advice Jordan the assessability and deductibility of the below transactions. Show calculations and support your advice by reference to relevant tax legislation and tax cases.
Jordan arranges for a concrete ramp to be placed at the back of the Coogee property as his elderly relatives s requested to have it as the stairs are steep and dangerous, going from the house to the backyard. The cost of installing the concrete ramp at the property was $4,000 and the contractors started work on the 21 August 2017 and the ramp was completed on the 30 August 2017. Jordan and his relatives were very happy with the concrete. Jordan purchased the property back in December 2017 for $350,000.
Hint: Items to be identified:
- Cost of Ramp
- Structural Improvement and capital works
- If an item comes with Division 40 (depreciating asset) and Division 43 (capital works), Division 43 takes priority
Guide
Step 1: Understand the question and the facts
Step 2: Identify the taxation law issues that are raised (see below items)
Step 3: Research the relevant legislation and case (see ‘Principles of taxation law’ Topics, 2, 5, 6,7,8, 9,11,12,13,14, 25.)
Step 4: Apply the law to the problem, referring to relevant cases and legislation
Step 5: Form a conclusion.
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