Question

Question 4 1 pts Barry is an Australian resident individual taxpayer entity. During the income year Barry is employed by Jim's Mowing and earns $58,000 in wages. He also receives $500,000 from the disposal of an investment property purchased in September 2002, which he originally acquired for $200,000. Prior to their death, Barry's partner received an invalidity service pension of $30,000, due to injuries received whilst on duty. Barry has prior year net capital losses of $20,000. What is Barry's assessable income for the income year? $578,000 $228,000 $198,000 $188,000 $238,000

Answer 1

Ans: The Correct answer is $188000.

Assessable Income of Barry for the Income year:

Particulars	Amount ($)
Wages	$58000
Capital Gains (Refer Note 1)	$130000
Invalidity Service Pension (Refer Note 2)	$0
Assessable Income	$188000

Note-

1. The Capital Gain Tax is calculated by treating net capital gains as taxable income in the year the asset was sold or disposed of. If you have held that asset for more than 12 months, the gain is first discounted by 50% for individual taxpayers. Gain on Sale of Investment- $500000-$200000= $300000 * 50% = $150000. Capital Loss can be set off again capital gain of the year. Net Capital Gain = $150000-$20000 = $130000

2. There are a number of situations where a person may be eligible for invalidity service pension except when the person is receiving another income support payment. Barry received wages and capital gain and therefore he will not be eligible for invalidity pension of their partner.