Required: Discuss the following, including showing workings where appropriate (citing authority): Sonia's deductions regarding the laptop for the current 2023-24 tax year; and Tania's deduction for the lounge for the current 2023-24 tax year For both Sonia and Tania, where there is a choice of methods in calculating the deductions, use the method that will give the highest deductions for the tax year. Sonia is an employee accountant who buys a laptop for $1000 on 1 March 2024. She uses it 70% for work purposes, 10% for playing games and 20% for her studies (she is currently studying for her CPA qualifications). A month after owning this laptop Sonia accidentally dropped it and cracked its screen. Subsequently, on 1 April 2024 she pays $500 to have the screen replaced with a new screen that is of much higher resolution than the original one of the laptop. The effective life of the laptop is 3 years. Sonia’s friend Tania runs a small business (as a sole trader) with an aggregated turnover of approximately $1 million, which has chosen to use the simplified depreciation rules. On 1 February 2024, this business paid $10,000 to purchase a new 3 seat lounge suite for the customer waiting room in its office premises. The effective life of the lounge is 10 years.
Required: Discuss the following, including showing workings where appropriate (citing authority):
- Sonia's deductions regarding the laptop for the current 2023-24 tax year; and
- Tania's deduction for the lounge for the current 2023-24 tax year
For both Sonia and Tania, where there is a choice of methods in calculating the deductions, use the method that will give the highest deductions for the tax year.
Sonia is an employee accountant who buys a laptop for $1000 on 1 March 2024. She uses it 70% for work purposes, 10% for playing games and 20% for her studies (she is currently studying for her CPA qualifications). A month after owning this laptop Sonia accidentally dropped it and cracked its screen. Subsequently, on 1 April 2024 she pays $500 to have the screen replaced with a new screen that is of much higher resolution than the original one of the laptop. The effective life of the laptop is 3 years.
Sonia’s friend Tania runs a small business (as a sole trader) with an aggregated turnover of approximately $1 million, which has chosen to use the simplified
Step by step
Solved in 2 steps
