Assessment item 2 – Problem Solving Question
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Due Date: 22-Sep-2020
Return Date: 16-Oct-2020
Length: 3500 words
Submission method options: Alternative submission method
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James is a dentist living in Melbourne and in October 2016, James inherited a 500 acre sugarcane farm in far north Queensland.
The market value of the farm at the time of Jacob’s passing was $790,000.
The farm had originally been purchased in two lots by Jacob. The first lot of 400 acres was bought in June 1983 for $440,000 and the other 100 acres was purchased in May 1997 for $380,000.
James employed a manager to run the farm. A downturn in the dairy industry over the next few years meant that James decided to sell the farm before he started incurring losses. A new market valuation obtained in January 2020 showed that the farm was now worth $910,000.
A real estate friend of James’ suggested that he could achieve a better sale price if he were to sub-divide the dairy farm and sell it off in smaller blocks. This seemed like a good idea to James so he hired the real estate to complete the sub-division and sell the blocks on his behalf.
The real estate obtained council approval and the farm was re-zoned to allow for a sub-division of 40 blocks of 5 acres each. The remaining block of 300 acres which included the homestead remained zoned as farmland. This block was part of the original parcel of 400 acres purchased in June 1983.
The real estate organised for a surveyor as well as connections for electricity, water and telephone along with road access to each block. All up the cost of the sub-division including the agent’s fees was $1,400,000.
In the year ended 30 June 2020, the real estate had managed to sell 15 of the small blocks for $80,000 each and the block with the house on it for $750,000. Agent’s commission and legal fees amounted to $70,000 for these sales.
Advise James of the taxation consequences of the sales he made in the 2020 financial year. Note, you are not required to calculate any capital gain. (15 marks).
During the university holidays Stephanie, a medical student, works at the Medical Registrations Board branch office in Bathurst, NSW, and has done for the past two years. Stephanie lives in Blayney, NSW and drives half an hour to Bathurst each day for work. Her annual earnings this year are $25,000. The Registration board head has indicated she would like Stephanie to continue working at the Board on graduation with a promotion. This year, due to the increase in the number of medical students graduating this year a branch has been opened in Orange, half an hour’s drive from Bathurst. Stephanie has been required to work in Bathurst each morning and then drive over to Orange for the second half of the day. She then drives straight home to Blayney which is half an hour from Orange.
Whilst working for the Medical Registrations Board Stephanie was also required to travel to each major city in Australia to assist with a system upgrade for the Registration Board and she acquired enough frequent flyer points with Qantas to obtain a free return ticket to the United Kingdom worth $2,000.
Stephanie lives in a flat over a corner store in Blayney where she is available to sign for deliveries to the store at any time, as needed, as the owners of the shop and flat live in Bowral, NSW and this arrangement suits them. She has use of the flat accommodation (worth approximately $15,000.00 per year) for free as long as she does not sub-let the flat or have a flat mate there.
Expenses incurred during the year included:
Dry-cleaning the optional uniform Stephanie had purchased, $1,200.00 being $500.
Travel costs have been $6,000 with the cost associated with travel between being Bathurst and Orange $3,000.00
Books and medical studies related expenses $3,000
HECS-HELP debt $60,000.
Advise Stephanie of the taxation consequences of these transactions for the year with reference to statute and case law.
Would your answer be any different if Stephanie received payment of $5,000.00 from the store owner each Christmas?
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SUBJECT LEARNING OUTCOMES
This assessment task will assess the following learning outcome/s:
• be able to locate and analyse the sources of taxation law in Australia.
• be able to describe and access the Australian regulatory taxation system and compliance regime.
Covering Topics 5 to 11, this assignment has been designed to ensure that students are able to identify and apply legislation, rulings and case law to the issues identified as well as demonstrate the ability to analyse the issues fully and apply this knowledge to a hypothetical, practical situation. The task assesses your ability to:
• be able to use legal research skills to apply the law to legal problems relating to taxation so as to reach a solution.
• exercise critical and reflective judgment; and
• develop your written skills
GRADUATE LEARNING OUTCOMES
This task also contributes to the assessment of the following CSU Graduate Learning Outcome/s:
• Academic Literacy and Numeracy (Knowledge) – Charles Sturt Graduates understand the use and structure of appropriate language in written, oral, visual, mathematical, and multi-modal communication.
• Academic Literacy and Numeracy (Skill) – Charles Sturt Graduates demonstrate the literacy and numeracy skills necessary to understand and interpret information and communicate effectively according to the context.
• Academic Literacy and Numeracy (Application) – Charles Sturt Graduates consider the context, purpose, and audience when gathering, interpreting, constructing, and presenting information.
MARKING CRITERIA AND STANDARDS
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In assessing your assignment the marker will expect you to:
• present an essay that is readable and coherent;
• use appropriate language, correct spelling and grammar;
• identify and analyse relevant issues;
• explain and apply relevant cases, rulings and legislation;
• reach a sound and well-reasoned conclusion;
• use appropriate referencing; and
• demonstrate time management skills.
The following criteria will form the basis of assignment of marks for the problem solving question.
Criteria High Distinction Distinction Credit Pass Fail
Students are required to answer problem type questions in order to demonstrate: To meet this level you will achieve a cumulative mark of over 85%. A mark in this range indicates that a student: To meet this level you will achieve a cumulative mark of 75-84%. A mark in this range indicates that a student: To meet this level you will achieve a cumulative mark of 65-74%. A mark in this range indicates that a student: To meet this level you will achieve a cumulative mark of 50-64%. A mark in this range indicates that a student: At this level you will obtain a mark of 0-49%. A mark in this range indicates that a student:
Identification of relevant legal issues Correctly identifies all the tax law issues and formulates them with consideration of links to relevant law. Correctly identifies all the tax law issues and formulates them with consideration of links to relevant law, with only minor errors. Identifies and correctly formulates most major tax law issues and supported by relevant law. Identifies some tax lawl issues. May or may not formulate them correctly. Considers and links to relevant law, Identifies no relevant issues or only a few of them. Some of these may be unclearly formulated. Considers few contextual factors of relevant law.
Explanation of law and citation of relevant legal authority Provides a complete explanation of the law, justified by relevant taxation law, with no errors. Discussion identifies key statute and case law stating relevant principles and shows insight in identification and discussion of potentially hidden issues. Research of relevant legal authority shows a breadth of investigation through detailed analysis, discussion and tax computation. Provides a comprehensive explanation of the taxation law with few errors, substantiated by relevant case and statute law stating relevant principles. Research of relevant legal authority shows a breadth of investigation through detailed analysis, discussion and tax computation. Provides a substantial explanation of taxation law and tax computation but with some errors, substantiated by significant legal authority in the form of statute and case law. Provides a basic explanation of the taxation law and tax computation, but with significant errors, substantiated by some legal authority. Provides incorrect or limited explanation of the taxation law and tax computation using no, or only a limited range of, authority.
Application of legal principles to the facts and tax computation Applies the law to the facts so as to reach a correct conclusion on all issues, with no errors. Argument discusses linkages between facts and the law and considers counter-arguments, completes tax computation correctly if required and evaluates the impacts of applying the law to the situation considering a broad range of factors that may affect the application. Conclusion draws together advice for client. Applies the law correctly to the facts so as to address all issues, with only minor errors. Argument discusses linkages between facts and the law, completes tax computation correctly if required and evaluates the impacts of applying the law to the situation considering factors that may affect the application. Conclusion draws together advice for client.
Applies the law correctly to most issues arising from the facts, but with some errors. Argument discusses application of the law and completes tax computation correctly if required with some minor errors. Conclusion summarises advice for client. Makes a basic attempt to apply the law to the facts, but applies wrong law and / or contains significant errors in the application. Argument summarises application of the law, formula for tax computation identified and completed with errors. Advice to client is incomplete. Paper does not correctly apply law to the facts and / or applies incorrect law. May be descriptive, rather than putting forward a reasoned argument. Does not attempt tax computations.
Compliance with the Style Guide, tax computation format and overall structure. Uses Style Guide comprehensively, accurately and consistently. Uses ILAC mode and tax computation format. Extremely well structured and organised, with one main argument introduced per paragraph, supported by well-written supporting sentences. Uses Style Guide accurately and with only minimal errors. Uses ILAC model tax computation format. Well structured, with one main argument introduced per paragraph. Adequate use of Style Guide, with some errors or lapses. Uses ILAC model, tax tax computation format and is clearly structured. Limited or inconsistent use of Style Guide. Some attempt at use of ILAC model, tax computation format and at structuring of answer. Poor, inconsistent or inaccurate use of Style Guide. Poorly structured. Inadequate or no use of paragraphs. May have disregarded the ILAC model and tax computation format.
Written expression, calculation and editing. Uses appropriate academic writing which is formal, impersonal and which contains no spelling, grammar,punctuation and calculation errors. Paper demonstrates careful proofreading. Uses appropriate academic writing which is formal, and impersonal with only very minor spelling, grammar, punctuation and calculation errors. Paper demonstrates careful proofreading. Uses appropriate academic writing which is formal and impersonal, with a few spelling, grammar, punctuation and calculation errors. Paper demonstrates evidence of proofreading. Significant spelling, grammar, punctuation and calculation errors but the paper is readable and demonstrates some attempt at proofreading. Poor grammar, spelling,and /or punctuation. Showing little or no calculation. Paper gives no evidence of having been proof-read.
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General Guidance for Law Assessment Tasks:
• Word-process or type your assignment clearly.
• Clearly show the subject name, your name and the date at the beginning of the assignment.
• Use size A4 paper and leave at least a 3 cm margin on the right-hand side of the page. (This is the best format for both marking and photocopying.)
• Number each page of the assignment.
• The answers should be confined to 3,500 words in total, bibliography excluded. Assignments should be neatly typed in Times New Roman, 12 point font.
• A consistent system of footnotes or the APA Referencing System is required. Case and statute names should be italicised.
• Answers must be original. They should demonstrate that students not only have read and understood the Study Guide and prescribed readings but also have broadened their knowledge by having read other reference works. Marks will not be awarded for duplication of paragraphs from the Modules or textbooks.
• Answers should have a complete bibliography listing all books and articles consulted. Beware of using the unacknowledged work of others. Plagiarism will result in zero marks and possible failure of the subject. (Refer to handbook rules).
• Students must, in the course of answering questions, refer to and discuss relevant case authorities and appropriate statutory provisions in order to support the propositions and submissions made.
Also note the following style guide:
1. You should use the ILAC style of essay writing for this assignment
2. Do not re-state the question as part of your answer. This often gets repeated in the issue section, however that is incorrect.
3. Use in-text referencing. Do not use footnotes.
4. Names of cases or statutes should be italicised, and followed by the jurisdiction not in italics, for example: Acts Interpretation Act 1901 (Cth). Note the abbreviation for ‘Commonwealth’ is ‘Cth’ not ‘Cwlth’.
5. Do not start a new line simply because you are starting a new sentence.
6. Start each paragraph on a new line, and leave a clear line gap after the preceding paragraph. Dont make your paragraphs too long.
7. You must end your assignment with a bibliography that is divided into three separate parts, listing statutes, cases and books / articles / on-line Modules.
PLEASE NOTE THAT YOU WILL LOSE MARKS IF YOU DO NOT COMPLY WITH THIS STYLE GUIDE.
NOTE: Assessments for this subject are required to be submitted via Turnitin.
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Your answers to both the Problem Solving Questions in this Assessment task must be fully referenced. Referencing is the acknowledgement of information sources in your work; it is the appropriate way to give credit to the original owner of an idea, piece of writing or creative work. You will be required to use the APA style of referencing and guidelines for using this style can be found on the CSU Referencing website at https://student.csu.edu.au/study/referencing-at-csu.