Travel Expense Deductibility Free Samples for Students-Myassignment

Question: Advise Jim on the Deductibility of Travel Costs in respect of the following travel. 1.Driving from his office in the CBD to another court located in a suburb in Sydney and then driving home; 2.Driving from his office in the CBD directly to the farm in Cooma, with 4 big folders of file he intend to review there; 3.Driving from office in the CBD to home and then to the farm in Cooma. Answer: The key intent is to opine on the travel cost deduction that could be availed by Jim whose profession in a barrister but also has a farm which also produces assessable income. As per s. 25-100, ITAA 1997 in order to gain deductions with regards to travel expense, namely two conditions outlined below have to be fulfilled[1]. The presence of the taxpayer at the initial location must be associated with commercial or income producing activity.Further, after the taxpayer has shifted to a new location, then for the new location also, associated with commercial or income producing activity is imperative. Additionally, s. 25-100(3) states that tax deduction is not valid is either the source or the destination is the residence of the given individual[2]. Scenario 1: In the given case, Jim starts from Sydney CBD based office to a court located in suburb of Sydney. The travel expense deduction is not applicable in this case as Jim has finished his work after attending the court proceedings goes to his home as per s. 25-100(4). Also, the travel from the court to the home(destination) would not result in deductible expense as per tax ruling IT 112 and also the verdict of the Lunney and Hayley v FC of T[3] case along with s. 25-100(3), ITAA 1997[4]. Scenario 2: In this scenario, Jim travels from his office in Sydney to the farm located in Comma and he has not yet finished his work due to which some pending work, he has brought at the farm also. It is evident that both the locations i.e. source and destination tends to produce assessable income while being unrelated. Thus, in accordance with s.25-100(1), ITAA 1997 and also the decision in Commissioner of Taxationv Payne[5]case, it is evident that the travel expense would be deductible for tax purpose. Scenario 3: The given details indicate the Jim travelled from his office to home. Then, he travelled to his farm at Cooma which is used to produce commercial income. It is apparent that in one of the cases the destination is the residence and in the other residence is the source. Thus, as per tax ruling IT 112 and also the verdict of the Lunney and Hayley v FC of T[6] case along with s. 25-100(3), ITAA 1997, the travel expenses would not be held tax deductible[7]. Bibliography Commissioner of Taxationv Payne[2001] HCA 3 Lunney and Hayley v FC of T (1958) 100 CLR 478 Stephen, Barkoczy, Foundation of Taxation Law 2015 Barkoczy,Stephen, Foundation of Taxation Law 2015, (North Ryde, CCH, 2015), 87-88Ibid. 1 Lunney and Hayley v FC of T (1958) 100 CLR 478Ibid.1 Commissioner of Taxationv Payne[2001] HCA 3Ibid. 3Ibid,1