Taxation Law for Low Value Pool Deduction- myassignmenthelp.com

Question: Discuss about theTaxation Law for Low Value Pool Deduction. Answer: Computation of Low Value Pool Deduction Desktop Computer In the Books of Edward For the year ended 2015-16 Computation of Low Value Pool Deduction Desktop Computer Row Low Value Pool Deduction Amount ($) A Closing Balance of the pool 900 B Opening Adjustable Value 1250 C Add row (A+B) = D 2150 D Multiply row C by 0.375 806.25 E Taxable percentage use of asset 1250 F Additional Capital cost 0 G Add: Rows (E+F) 1250 H Multiply row G by 0.1875 234.375 I Total Low Value Pool Deduction 1040.625 B: Furniture In the Books of Edward For the year ended 2015-16 Computation of Low Value Pool Deduction Furniture Row Low Value Pool Deduction Amount ($) A Closing Balance of the pool 2400 B Opening Adjustable Value 3000 C Add row (A+B) = D 5400 D Multiply row C by 0.375 2025 E Taxable percentage use of asset 3000 F Additional Capital cost 0 G Add: Rows (E+F) 3000 H Multiply row G by 0.1875 562.5 I Total Low Value Pool Deduction 2587.5 Filing Cabinet In the Books of Edward For the year ended 2015-16 Computation of Low Value Pool Deduction Filling Cabinets Row Low Value Pool Deduction Amount ($) A Closing Balance of the pool 890 B Opening Adjustable Value 1000 C Add row (A+B) = D 1890 D Multiply row C by 0.375 708.75 E Taxable percentage use of asset 1000 F Additional Capital cost 0 G Add: Rows (E+F) 1000 H Multiply row G by 0.1875 187.5 I Total Low Value Pool Deduction 896.25 From the above stated computation the questions that is bought forward is regarding claiming an allowable deduction for the declining value of the low cost and low value assets that an individual makes in the course of generating or producing the taxable income at the time of filing tax return (Barkoczy, 2016). As evident from the current of Alpha it is noticed that the declining value of the asset that is reported for that period are less than $1000. Alpha reported an asset namely furniture and cabinet filings for which it used prime cost method. According to the rule of the Australian Taxation Office an assumption can be bought forward in the present situation of Alpha that assets such as furniture and cabinet are valued under the prime cost method (Woellner et al., 2016). Therefore, Alpha will not be allowed claim an allowable deduction at the time of filing income tax return. On the other hand, it is noticed that Desktop computers was valued under the diminishing cost method and an allowable deduction can be claimed at the time of filing income tax return by Alpha. Reference List: Barkoczy, S. (2016). Foundations of Taxation Law 2016.OUP Catalogue. Woellner, R. H., Barkoczy, S., Murphy, S., Evans, C., Pinto, D. (2016).Australian Taxation Law Select: Legislation and Commentary 2016. Oxford University Press.