Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Taxation Expert

problem: Wesley is a self-employed web site designer. He designs websites and manuals. He is not registered for GST. He is also employed part-time as a book keeper for a manufacturing company. His receipts and payments for the year ended 30 June 2013 are as follows:

Receipts :

$252,000 Fees
30,000 Net Salary (after employer had withheld tax instalments of $15,000).
18,230 Rental income from investment property.
6,000 Dividend franked to 60% received from an Australian resident public company.
1,000 Medical Expense refunds from Medicare.

Payments:

$3,000 Rates and Insurance on income producing property.

16,000 Interest on money borrowed to purchase the income producing property.

4,569 Cost of hospital, dental expenses for Wesley and his wife May Ling.

1,000 Dentist fees paid for Wesley’s son who is 23 years of age and a full-time University student. The son has income of $7,000.

30,000 Repairs to the rental property, which consisted of $10,000 to paint the outside of the house and $20,000 to upgrade the kitchen with better fittings. The painting was due to normal wear and tear 5,000 Borrowing expenses relating to a new loan on the rental property, which is used exclusively for income producing purposes? The loan is for 6 years and began on 1 November 2012.

1,500 Travel to and from work by train.

2,000 Rates on family home (used 10% for work purposes)

1,000 Legal fees paid to a solicitor to collect outstanding trade debts from his business.

2,000 Donations ($1,000 to the Red Cross and $1,000 to the Collingwood Football Club).

1,000 Paid to his wife for 2 hours work. The normal pay for such a job would be $275

36,547 Purchase of materials, inks etc to produce manuals

NOTES:

a) His trading stock of manuals on hand at the end of the year was valued at $27,000 (at cost price), $28,000 (at replacement price), and $29,000 (at market selling value). Opening stock of manuals was valued at $30,000.

b) The Tax Depreciation Schedule for existing assets as at 30 June 2013 shows depreciation of $22,000.

c) The following assets were purchased during the year:

Printer $2,569 on 12 February 2013. Its effective life is 5 years.
Apple Mac $3,590 on 23 September 2012. Its effective life is 3 years.

REQUIRED:

On the basis of the information provided you and assuming that there are no other circumstances affecting his tax liability, discuss the assessibility/deductibility of the above receipts/expenses, and determine Wesley’ taxable income for the 2012/13 income tax year.
 
In your answer you must provide references to the relevant sections of the ITAA 1936 and ITAA 1997, case law, Tax Rulings or Tax Determinations. You should ignore the possible incidence of GST while answering the above requirements.

You should also provide a summary of your discussion in the following format (you may need to discuss business income and rental income separately).

Taxation, Accounting

  • Category:- Taxation
  • Reference No.:- M99152

Have any Question? 


Related Questions in Taxation

Taxation law and compliance individual assignmentquestion 1

TAXATION LAW AND COMPLIANCE INDIVIDUAL ASSIGNMENT Question 1 - Mary Jackson is a marketing consultant and on 10 February 2016 she was relocated to Brisbane. In order to facilitate the move, her employer Elite Retail paid ...

Tax returnuse the following information for jkeb

Tax Return Use the following information for JKEB Corporation to complete pages 1 through 3 of the 2011 Form 1120. The final return is due in week five. Address: 1994 Lincoln St, Township, FL 34691 Employer Identificatio ...

Spencer duck tax returnsspencer duck is single and his

Spencer Duck Tax Returns Spencer Duck is single and his eight year old son, Mitch, lives with him nine months of the year in his mother, spencer's ex-wife, during the summer months. his mother provides more than half of ...

Taxation theory practice amp law assignment case study 1

Taxation, Theory, Practice & Law Assignment Case study 1: Capital Gains Tax Fred is a resident who signed a contract to sell his holiday home in the Blue Mountains in August last year. The sale was settled in February th ...

Taxation theory practice amp law assignmentit is the

Taxation, Theory, Practice & Law Assignment It is the responsibility of the student submitting the work to ensure that the work is in fact his/her own work. Ensure that when incorporating the works of others into your su ...

Question during the year inez recorded the following

Question: During the year, Inez recorded the following transactions involving capital assets. Gain on the sale of unimproved land (held as an investment for 3 years) Loss on the sale of a camper (purchased 2 years ago an ...

Question 1two years ago peta purchased a house in kew this

Question 1 Two years ago Peta purchased a house in Kew. This house had two old tennis courts down the back which were in poor condition. She purchased the property for two reasons: - so that she and her family could live ...

Taxnbsp final project assignmentin this assignment you will

TAX  Final Project Assignment In this assignment you will demonstrate your mastery of the following course outcomes:  Assess the potential gift or estate tax liability in relation to the annual exclusion, gift tax deduct ...

Tax issuesin a two to three page summary describebullwhat

Tax Issues In a two to three page summary, describe; • What is the Partner's capital account? • What can Partners' contribute to establish a capital account? • What is the profit and loss allocations? What document is th ...

Question - two years ago peta purchased a house in kew this

Question - Two years ago Peta purchased a house in Kew. This house had two old tennis courts down the back which were in poor condition. She purchased the property for two reasons: so that she and her family could live i ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate