Question 1

Which of the following statements is incorrect?

Accepted Answer

A)  A mobile phone expense involving 100% of calls for private purposes is not deductible under section 8-1 ITAA97 
B)  The purchase costs of new machinery to a taxpayer carrying on a business is not deductible under section 8-1 ITAA97 
C)  The payment of speeding fines would be deductible under section 8-1 ITAA97 
D)  Expenses relating to the derivation of exempt income are not allowable as a deduction under section 8-1 ITAA97 
A)  A mobile phone expense involving 100% of calls for private purposes is not deductible under section 8-1 ITAA97 
B)  The purchase costs of new machinery to a taxpayer carrying on a business is not deductible under section 8-1 ITAA97 
C)  The payment of speeding fines would be deductible under section 8-1 ITAA97 
D)  Expenses relating to the derivation of exempt income are not allowable as a deduction under section 8-1 ITAA97

Question 2

Stuart is a self employed architect and during the school holidays each year he has his 14 year old son come into his offices to empty the rubbish bins and do some general tidying. For this work the son was paid $20,000. The ATO has recently reviewed Stuart's business claims and determined that the reasonable amount for Stuart's son's services should only have been $2,000. Based on these facts, which of the following statements is true?

Accepted Answer

A)  Stuart can still claim the full $20,000 as a deduction under section 8-1 ITAA97 
B)  Stuart cannot claim any amount of the $20,000 paid to his son as a tax deduction due to section 8-1 
C)  The amount that is excessive is not deductible due to section 26-35 ITAA97 
D)  Section 26-35 allows the full amount paid as deductible 
A)  Stuart can still claim the full $20,000 as a deduction under section 8-1 ITAA97 
B)  Stuart cannot claim any amount of the $20,000 paid to his son as a tax deduction due to section 8-1 
C)  The amount that is excessive is not deductible due to section 26-35 ITAA97 
D)  Section 26-35 allows the full amount paid as deductible

Question 3

Edward is required to travel for work. Which one of the following statements is correct regarding his claiming of his travel expenses?

Accepted Answer

A)  Edward is required to keep a travel diary for any travel, away from his usual residence, that is for more than 6 nights in a row 
B)  Edward does not need to keep any records regarding his travel as his employer will write a letter confirming that Edward was required to travel for work purposes and this will be sufficient evidence 
C)  Edward can jot some basic notes in his diary about when he left his usual residence and when he returned and this will be sufficient even for travel for more than 6 nights in a row 
D)  Edward does not need to keep any records and can deal with his record keeping whenever he is subject to an audit 
A)  Edward is required to keep a travel diary for any travel, away from his usual residence, that is for more than 6 nights in a row 
B)  Edward does not need to keep any records regarding his travel as his employer will write a letter confirming that Edward was required to travel for work purposes and this will be sufficient evidence 
C)  Edward can jot some basic notes in his diary about when he left his usual residence and when he returned and this will be sufficient even for travel for more than 6 nights in a row 
D)  Edward does not need to keep any records and can deal with his record keeping whenever he is subject to an audit

Question 4

Cedric uses his mobile phone for work. He has kept a diary for one month itemising his calls and has determined that his work use of his mobile phone is 40%. If his total mobile expenses are $1,200 for the year, what amount is Cedric entitled to claim?

Accepted Answer

A)  $480 
B)  $720 
C)  $1,200 
D)  $0 
A)  $480 
B)  $720 
C)  $1,200 
D)  $0

Question 5

If the payment date or nature of the services is missing from a receipt, which of the following statements is correct?

Accepted Answer

A)  The taxpayer is denied the deduction for that expense 
B)  The taxpayer is free to change the amount of the expense to maximise their claim 
C)  The taxpayer should make something up about the date and the nature of the services 
D)  The taxpayer may use bank statements or other reasonable evidence to show when the expense was paid, or they may write the nature of the goods or services onto the document. 
A)  The taxpayer is denied the deduction for that expense 
B)  The taxpayer is free to change the amount of the expense to maximise their claim 
C)  The taxpayer should make something up about the date and the nature of the services 
D)  The taxpayer may use bank statements or other reasonable evidence to show when the expense was paid, or they may write the nature of the goods or services onto the document.

Which of the following statements is incorrect?

Edward is required to travel for work. Which one of the following statements is correct regarding his claiming of his travel expenses?

Cedric uses his mobile phone for work. He has kept a diary for one month itemising his calls and has determined that his work use of his mobile phone is 40%. If his total mobile expenses are $1,200 for the year, what amount is Cedric entitled to claim?

If the payment date or nature of the services is missing from a receipt, which of the following statements is correct?

The Australian Taxation System and the Tax Formula

Residency and Source of Income

Assessable Incomeincome Tax

Capital Gains Tax

Fringe Benefits Tax

Specific Deductions Andapplications Ofdeductibility

Capital Allowances

Tax Accounting and Trading Stock

Taxation of Individuals

Taxation of Companies

Taxation of Partnerships, Joint Ventures, Trusts and Superannuation

Goods and Services Tax

Ethics, Tax Avoidance and Evasion

Filters

Exam 6: General Deductions

Which of the following statements is incorrect?

Edward is required to travel for work. Which one of the following statements is correct regarding his claiming of his travel expenses?

Cedric uses his mobile phone for work. He has kept a diary for one month itemising his calls and has determined that his work use of his mobile phone is 40%. If his total mobile expenses are $1,200 for the year, what amount is Cedric entitled to claim?

If the payment date or nature of the services is missing from a receipt, which of the following statements is correct?

The Australian Taxation System and the Tax Formula

Residency and Source of Income

Assessable Incomeincome Tax

Capital Gains Tax

Fringe Benefits Tax

Specific Deductions Andapplications Ofdeductibility

Capital Allowances

Tax Accounting and Trading Stock

Taxation of Individuals

Taxation of Companies

Taxation of Partnerships, Joint Ventures, Trusts and Superannuation

Goods and Services Tax

Ethics, Tax Avoidance and Evasion

Filters