TUA Masters Module 4.2 Specific deductions.ppt

TUA Masters Module 4.2 Specific deductions.ppt - Module 4.2...

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Module 4.2 Specific deductions
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Recommended problem solving methodology 5. Deductions 1) Specific deductions 2) General deductions 3) Limitations Prevent a deduction or limit its amount For each SD provision note: 1. What type of amount is allowed as a SD. 2. How much is allowed as a SD. 3. When is the deduction allowed – for tax accounting. 2
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Specific deductions: s8-5 (1) You can also deduct from your assessable income an amount that a provision of this Act (outside this Division) allows you to deduct. (2) Some provisions of this Act prevent you from deducting an amount that you could otherwise deduct, or limit the amount you can deduct. (3) An amount that you can deduct under a provision of this Act (outside this Division) is called a specific deduction . 3 .
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For a summary list of provisions about deductions, see section 12-5 s8-5 does not operate to allow a deduction. Deduction is allowed by other SD provisions. s8-5 calls the amount a “specific deduction”. 4
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Relationship between provisions about deductions 8-10 No double deductions If 2 or more provisions of this Act allow you deductions in respect of the same amount (whether for the same income year or different income years), you can deduct only under the provision that is most appropriate. 5 To determine the provision that is “most appropriate”, rely on the rule of statutory interpretation that specific provisions prevail over general provisions. The “most appropriate” provision is the most specific.
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SPECIFIC DEDUCTIONS Topics Specific deductions under the 1997 Act (No: 10 p 1-8) Some amounts that can be deducted: Div 25 Car expenses: Div 28 Gifts or contributions: Div 30 Tax losses of earlier income years: Div 36 Capital allowances: deductibility of capital expenditure: Div 40 Excess of opening value over closing value of trading 6
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Specific deductions under the 1936 Act (p 8) Partner’s individual interest in partnership loss: s92(2) 7
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Some amounts that can be deducted: Div 25 Tax related expenses: s25-5 Repairs: s25-10 Amount paid for lease obligation to repair: s25- 15 Lease document expenses: s25-20 Borrowing expenses: s25-25 Expenses of discharging a mortgage: s25-30 8
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Some amounts that can be deducted: Div 25 Bad debts: s25-35 Loss from profit-making undertaking or plan: s25-40 9
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Some amounts that can be deducted: Div 25 Loss by theft, etc, of money included in assessable income: s25-45 Payments of pensions, gratuities or retiring allowances: s25-50 Payments to associations: s25-55 10
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Transport expenses of individuals travelling directly between “workplaces”: s25-100 Capital expenditure to terminate a business lease or licence: s25-110 11
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25-10 Repairs (1) You can deduct expenditure you incur for repairs to premises (or part of premises) or a *depreciating asset that you held or used solely for the *purpose of producing assessable income.
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  • One '14
  • Depreciation, Expense, Generally Accepted Accounting Principles, assessable income, Law Shipping Co Ltd

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