1. Allan and Betty were living and working in Melbourne. They decided on a 'tree change', Sold their Melbourne home and purchased a large country house on a 10 hectare block In central Victoria. Betty works part-time accountant and Allan as a locum doctor. Allan Is popular with the elderly patients in the town and regularly is given home-made cakes And scones, along with his fees. On one occasion he treated a local wine maker's dog for Snake bite when the vet was unavailable and was given a dozen bottles of Lonarch Brae Shiraz in appreciation. The wine had a retail value of $360. Hints: he is a doctor by profession. Non cash payment is assessable or not Section 6-5 or section 21-A Wine as threshold 2. Allan and Betty enjoy gardening. They plan to establish a few hectares of grapes vines and Begin growing vegetables. They attend a continuing education course on organic farming And find in their second year they have a surplus of produce. Betty started making marmalade And relish using her mother's recipes. Initially she gave them to neighbours but they became So popular that she opened a stall at the Newtown Growers Market held on the second Sunday of every mounth. Allan sold excess to a local supermarket and now regularly supplies Three retailers with sweet potatoes and pumpkin. They don't keep record as they never intend To make profit but estimate that in a good month gross receipts could be $500 to $600. Hints: gardening is not their hobby. Look at the factors; regularity. They are carrying it as a business. 3. Their neighbours have a citrus ochard and throughout the year vegetables are swaped for oranges and mandarins. This seem like such a good idea Allan and Betty decide to set up A "barter" system in the area. To join the system a person must pay an upfront, one-off Fee of $50 to Allan and Betty as a charge for keeping of admintrative records. Thereafter People register their goods or services to be bartered. For example, Suzie is a retired hairdresser And will provide hairdressing services at her home. No money changes hands. Suzie would receive a credit to her account of 15 to 20 'barts' that she can exchange for goods or services of equal value from other registered participants in the scheme (fruit, vegetables, child minding, Lawn mowing etc) Hints: he is getting fee of registration that is income GST 2003/04 rulings Required 1: (a) Advice Allan and Betty of any income tax implications arising in paras 1,2 and 3 above. (b) Advice the participants in the barter scheme of any income tax implications. Part B [1100 words] Nicole is an Australian actress who has had a number of roles in films and guest appearance In serials. During the year the following events occurred: 1) Nicole was offered a role in a telemovie set in the 1950s. she was required to put on 10 kilograms to play the part offered and would be awarded the role only if she put on Weight. Nicole increased her food intake dramatically, dining-out several times a week and eating fast food. She estimated she spent $1,000 on food that she would not normally have eaten. She was paid $50,000 for her role. Hints: spending on food was related to her job/role. She should get deduction on spending extra for food. She get $50000 income. 2) As a result of her weight gain Nicole had to buy new clothes at a cost of $2000. At the End of filming she wanted to loose weight and get back into shape so hired a dietician at Cost of $1000 and a personal trainer ($2500) and spent a week at a health clinic($1500). Hints: she want to loose weight on her own will has no relation with her performance. 2nd limb- she is not employee she get a fee for her service that is performance. 3) Nicole was paid $2000 by Woman's World for an interview in she spoke about her the New telemovie as well as her personal life. She donated the money to Royal children Hospital. Hints: section 6-5 payment for interview is her income as she Is celebrity and she also Did promotion of her new serial. She donated the interview fee she should get deduction under division 30 or any other division. 4) The telemovie received critical acclaim and Nicole was offered a small role in a Hollywood movie. Under the contract she was to receive $20,000. She flew first class To the United State at a cost of $5000; economy class would have been $2000. After filming she spent a week visiting agents in Hollywood in the hope of securing more roles. Nicole regarded the week as a 'Working Holiday" and she treated herself to "five star" accommodation at a cost of $6000. Hints: she flew to United states for her job only regardless class either first class or economy class travel. She spend 1 week extra for finding more jobs in United states and acting is her job and that week she regarded as a Working holiday. Either she get any deduction on that extra week spending or not and under which section/division. 5) A well known gossip magazine Eye Spy published a story about Nicole that contained A number of untruths. Ordinarily she would not have bothered about such things but with her career blossoming she was concerned that her reputation might be tarnished and future roles lost. She spend $10000 in legal fees, sued the magazine for libel and was successful in securing damages of $50000. Hints: the amount of sued she won is her income or not. She might lost her roles. Legal fee she spent should get deduction or not. Snowden & Wilson case 6) A short break in acting followed and at her manager's suggestion Nicole paid $1000 to a voice coach to improve her voice projection. Hints: deductible or not. Private or related to her career. 7) In the expectation that her career was to take off at last, Nicole shifted to a rented town house. She specially selected a two bedroom unit so that one room could be set aside for exclusive use as study/office. There she could read scripts, deals with the correspondence and meditate. Her manager suggested she would be entitled to a tax deduction for an appointment of the rent. Hints: apportion ate the rent depends upon personal and office use Required: Advise Nicole of the tax implications of the receipts and payments with relevant sections of the Act, case law and ATO rullings.