Question

Question 6 - Specific Deductions, self-education expenses, depreciation

Edward Summers is a senior meteorologist employed by the Weather Research Centre (WRC) in Australia. In July 201W he enrolled on a Marine Biology course at the University of Queensland with the intention of developing research on the effects of global warming on the Great Barrier Reef. In order to attend the course, Edward reduced his workload at WRC to 2 days per week.

During the year ending 30 June 201X, Edward incurred the following expenses:

1. $12,000 in course fees and $550 in textbooks.                                                                                                                                                                                               
2. $100 on broad-spectrum sunscreen, which he is required to wear as a matter of work safety during data collection trips to WRC meteorology stations.                                                                                                                                                                 
3. $200 on a backpack which he uses to carry his laptop and textbooks to work and to the University.                                                                                                        
4. $80 in road toll fees incurred while driving between home and work.                                                                                                                                                              
5. $3,000 on a laptop computer (effective life 4 years), purchased on 1 July 201W and used 80% for work and 20% for study.                                                                                                                                                                                                                            

Required

For each of the expenses listed in (a) to (e) above, advise Edward Summers on whether such expenses would be deductible in the year ending 30 June 201X, stating your calculations (if any) and applying legislation and case law to support your answer.

Answer 1

Answers:

A. Deductible

B. Not deductible

C. Not deductible

D. Not deductible

E. Deductible

.

Explanations:

A. Deductible because it falls under course/tuition fees but the first $250 for textbook is not deductible.

B. Not deductible because it is his personal expenses and for his own use.

C. Not deductible because it is his personal expenses and for his own use.

D. Not deductible because it from his home and work. Allowed are between home and place of education and between workplace and place of education

E. Deductible because it is a depreciable asset that is more than $300. The 20% of which is for study amounts to $600 is above the threshold. Depreciable assets are usually claimed over the life of the asset.