Question

PART B On Thursday, Ahmed sends you the following email with further information on Lisa’s circumstances. From: Ahmed Sent: Thursday, 17 September 2020, 11:23AM Subject: Lisa Eastwood – additional information Good morning, Lisa has sent through the following information.

Can you pull this together with what you have examined already so we can have a tax estimate ready to go.

Wages (Melbourne employment) - $125,000 net wages, PAYG withheld of $43,000 plus a bonus of $5,000 was paid.

Wages (Darwin employment) - $25,000 net wages, PAYG withheld of $1,500 Interest income $1,000

Allowable general deductions $3,300 Allowable specific deductions $1,000 Lisa is single with no private health insurance. Lisa has no reportable fringe benefits or reportable superannuation contributions.

Again, I need this by the end of Friday. Ahmed. Senior Accountant M&M Tax Accountants

Required: You are required to calculate Lisa’s taxable income and net tax payable for the year ending 30 June 2020 based on the above information provided, as well as the information in Part A of this assessment task. In doing so, you must present an accurate and complete analysis.

Please complete the following subset of FIVE questions to complete this part.

B.1 Calculate Lisa’s Taxable Income. Show all workings. (3 Marks)

Hint: You can use the following format:

Ordinary Income $X
Statutory Income $X
Total Assessable Income $X
General Deductions $X
Specific Deductions $X
Total Allowable Deductions $X
Taxable Income $X

B.2 Calculate Lisa’s Basic Tax Payable. Show all workings. (1.5 Marks)

B.3 Calculate Lisa’s Medicare Levy. Show all workings. (1 Mark)

B.4 Calculate Lisa’s Medicare Levy Surcharge. Show all workings. (1 Mark) B.5 Calculate Lisa’s Net Tax Payable. Show all workings. (1.5 Marks)

Part C

On Friday, Ahmed sends you a final email with some points of clarification on Lisa’s circumstances previously determined.

From: Ahmed Sent: Friday, 18 September 2020, 1:12PM Subject: URGENT: Lisa Eastwood – possible clarification Hey! Unfortunately, Lisa has just called. Her earlier details may be incorrect. Lisa will confirm on Monday the exact details; however, can you review the impact on her position if instead of renting the property for three years, it was rented for eight year. Apologies for the short notice on this one. Ahmed. Senior Accountant M&M Tax Accountants

Required: Re-examine your analysis in Part A and B and explain the impact of the change of circumstances. In doing so, you must present an accurate and complete analysis.

Please complete the following subset of FOUR questions to complete this part.

C.1 Re-assess the taxable capital gain (loss) on the sale of the home on the basis that Lisa rented the home for a period of eight years. Briefly justify your answer/show all workings. (4 Marks)

C.2 Re-calculate Lisa’s Net Capital Gain. Briefly justify your answer/show all workings. (2 Marks)

Hint: Copy, paste and edit your previously prepared response.

C.3 Re-calculate Lisa’s Taxable Income. Show all workings. (1 Mark)

Hint: Copy, paste and edit your previously prepared outline.

C.4 Re-calculate Lisa’s Net Tax Payable. Show all workings. (3 Marks)

Answer 1

calculation of lisa`s taxable income

ordinary income = $125000 + $25000 + $ 1000

statutory income= $ 43000 + $5000 + $1500

TOTAL ASSESSABLE INCOME $205000

general deduction = $3300

specific deduction = $1000

TOTAL ALLOWABLE DEDUCTION = $(4300)

TOTAL INCOME=$ 196200 (205000- 4300)