This assessment is to be completed in groups of no more than 4 to be allocated in class. All group disputes will be resolved by the lecturer and marks for non-participation will be deducted at the discretion of the lecturer after consideration of all complaints by group members.
Based on the following information,
1. calculate the income tax payable for Andrew Johns for the year 30 June 2016, and
2. briefly comment on all items listed
3. show all calculations.
- Andrew is 48 years of age and is a qualified real estate agent employed by Jan Pink Real Estate. He receives a salary of $85,000.
- Andrew is required to wear the uniform of the real estate agency.
- Andrew uses his own motor vehicle for showing properties to clients and estimates that he travels 12,500 km in the 2015/2016 year for this purpose. He does not keep any other records
- Andrew attended a conference on real estate and has receipts for this totalling $600.
- Andrew enrolled in a Postgraduate Diploma of Business (Real Estate) degree at Stott's Colleges as he was interested in increasing his business expertise. The course cost $7,200 and required him to attend 3 nights a week. Travel from work to the college is 15 km. Textbooks costs $420.
- Jan Pink Real Estate supplied Andrew with a laptop, mobile phone and travel allowance of $2,000.
- He also has a property that he owns and rents out throughout the year. Rents received throughout the year total $13,800. The property was purchased brand new and then immediately rented out. Construction of the house was valued at $50,000.
- Andrew and his wife Andrea operate a home improvement consultancy together and his partnership drawings from this venture for the year 2015/2016 is $4,320.
- Andrew is the director of a small investment company which pays him a directors fee of $3,200 each year to compensate for attending board meetings.
- He received the following dividends throughout the year:
|
Shares
|
Date received
|
Franking %
|
Amount
|
|
ATA
|
1/10/2015
|
Fully franked
|
2,000
|
|
BDX
|
31/7/2016
|
Unfranked
|
1,000
|
|
CSQ
|
15/3/2015
|
Franked to 60%
|
5,400
|
- On 1 January 1988 Andrew purchased 1,000 shares in DCL Ltd for $4.76 per share. On 1 April 1992, he also purchased 500 shares in SLC at $15.68 per share. In order to fund a holiday Andrew sold some of his shares on 15 December 2015 at the following prices:
o 500 DCL $8.96
o 250 SLC $14.95
o 125 SLC $13.44
- On June 10, 2016 contracts for the sale of Andrew's investment property were signed and the sale of $140,000 was settled on June 28, 2016.
The following costs had been incurred on the property:
Purchase price 1 September, 2012
(including the $50,000 construction costs) $80,000
Solicitor's fees and transfer costs on acquisition $5,000
Additions (Carport)(constructed 1 July 2015) $6,000
Sale costs $3,000
- While it was being rented the following expenses were incurred on the rental property:
o Rates $1,700
o Insurance $820
o Repairs $2,000
o Interest $6,000
o Travel to inspect property 80 km's
- Andrea, Andrew's wife is aged 45 years and has a full time job throughout the year and earned an adjustable taxable income of $43,000.
- They have two children aged 16 and 12. Both are at school.
- Andrew's payment summary shows $17,200 tax withheld
- He is advised that his partnership distribution for the year is $5,115.
- Andrew and Andrea do not have private health insurance.
- Tax agent's fees for lodging tax return in 2014/2015 year were $185.