A schoolteacher named who lives in Sydney, Australia named Clara received a gift voucher of one thousand dollars ($1,000) from her father during Christmas 2019. On the 1st of January 2020, she put this money toward the purchase of a laptop computer which cost $3,500. Clara used this laptop to prepare lesson plans, complete marking tasks and check work emails. She estimates that she uses this computer 60% of the time for work related purposes.
At the start of 2020, Clara became worried about her job security due to the COVID 19 pandemic and decided to start a Master of Data Science. She hopes that having this qualification might make it easier for her to find work in another industry if she were to be made redundant from her teaching position. Her employer did not contribute to the cost of the degree. The course fees for the 2020 income tax year were $20,000, which she paid upfront.
Also due to the COVID-19 pandemic, Clara was occasionally required to act as a relief teacher at other schools in her area. Clara was generally made aware of schools she had to attend for relief duties well in advance, although she was occasionally called in at short notice. On the days that she had to relieve at different schools, she would travel from home to that school, and then home again. She never attended more than one school on any given day.
In addition to her full-time work as a high school English teacher, in the 2019 income tax year, Clara started offering tutoring services for high school students as something to do in her spare time. She started by informally advertising her services via friends and family and on various community pages on Facebook. She used teaching materials that she had already developed in her teaching role for her tutoring. By July 2019, the number of tutoring clients had grown considerably. Clara decided to develop a business plan and opened a separate bank account for her activities. Clara has advised that she does accept cancellations without notice and does not charge in these instances. She also occasionally cancels a lesson if she has other plans.
a). Briefly explain why the gift voucher that Clara received for Christmas does not form part of her assessable income. You should support your answer, where appropriate, to the ITAA 1936, ITAA 1997 and ATO guidance materials and/or case law.
b). Calculate the depreciation deduction for the laptop computer, using the diminishing value method only. You should support your answer, where appropriate, to the ITAA 1936, ITAA 1997 and ATO guidance materials.
