Question

Individual Tax

In 2018/2019 financial year, one of your clients, Alex comes to you to do a tax return
for him. He wishes to minimize his tax liability. He provided you the following
information: (Note: the records are GST exclusive)
Receipts:
⚫ $60,000 Net Salary Payment (after withheld $20,000 tax)
⚫ $1,000 dividend from a public listed company (fully franked)
⚫ $1,000 dividend from a small business entity (60% franked)
⚫ $36,000 income from the investment property located in Sandy Bay
⚫ $5,000 partnership distribution as he is a partner in a dining car near UTAS
⚫ $50,000 winning from Wrest Point Casino as he is excelled at Math
⚫ $300 voluntary sponsorship from a local TV as he is a registered football player
⚫ $100 gift card sent from his clients as he did the client a favour
⚫ $12,500 sale of his shares to a close friend for 50% of its market value ($30,000
bought in 1 Oct 2008)
⚫ $2,000 sale of his newly bought iPhone XS ($2500 bought on 1 Oct 2018)
⚫ $600 sale of one sculpture (3 sculptures as a set bought at 1 Oct 2018 with each
one cost $300)
⚫ $1500 compensation for personal injury
⚫ $100,000 Coles Flybuy Points(2000 points = 10 dollars)
Expenditure:
⚫ $1,000 Interest on loan from ANZ (loan term 4 years 60% the loan was used to
purchase shares,40% of the loan was used to purchase a holiday package to Fiji)
⚫ $1,200 loan establishment fee for ANZ loan (on 1 March 2019)
⚫ $1,800 Interest on another loan from CBA(loan term 3 years, 100% of the loan
was used to purchase shares, but no dividend received in 18/19 tax year)
⚫ $1,500 loan establishment fee for CBA loan (on 1 April 2018)
⚫ $1,000 consulting fees paid to his lawyer in terms of his tax affairs
⚫ $800,000 paid for an investment house bought in 1 August 2018 while the cost of
the house is $400,000 based on a professional quantity surveyor
⚫ $100 donation paid to TAS Red Cross in exchange for chocolates (worth $2)
⚫ $2,200 paid to buy a Mac Book (bought on 15 Dec 2018, 100% for Work related
purpose, estimated effective life: 5 years)
⚫ $250 a second-hand furniture for the investment property
⚫ $100 laundry expense for his suit
⚫ $200 paid to buy 3 purely green suits due the requirement of his company
⚫ $90 bus fees as he sometimes goes to work by bus
⚫ $25 parking penalty at UTAS parking lot
⚫ Car expenditure:
Fuel $ 3,000
Car service 1,480
Four new tyres 1,300*
Car washes 1,450
Registration 450
Insurance 1,265
Depreciation 6,000
GPS accessories 1,000*
His logbook shows
Travel from home to work and back 25,000Km
Other work-related travel 22,000Km
Travel to do her shopping 12,000Km
*$1,300 Four new tyres replaced based on the suggestion of his mechanic
*$ 1,000 a new GPS accessories for the car as the old one is old fashioned
In addition, Alex have $1,000 tax loss from previous tax year. $2,000 capital loss
from a sale of a sculpture from previous tax year.Assume that all expenses include
GST where relevant.Alex does not have any health insurance.Alex does not have a
HECS/HELP debt. Calculate the tax liability or refund for Alex.

Answer 1

for Calculata of Tax liability Alex for the year 2018/19 Fy PARTICULARS 1 $ 60,000 s srit $ crons Incomes' Salary Dridend (exempted) compung Dividend from small businex |& you Investiment property $ 36,000 - patnership profi 5 (Exempted) (as partnerphop pays for the some profit). ~ lottery/ winnige pom - giftcard (excerpted) lose in sale of shares $ (17,500) → loss or sale of mobile $ (4+500) compensation from Engung (Esenpoled) sale of sculpture (proges) (600-floocosts] Total Income Crepenses $ 1,28901 - $d interests on loan fom anz $1,000 and loan establishment fees § 1,200 - interest on another loon (BA) $ 1900 and loan establishment fee $ 1500 T T 1 ſ Î Oasy &

→ - fees to laroyer Donation round to TAG Red Crops 1898 Net ($10o- & $2) payment to buy investment Honde { mac book not qualified for an deductable expenditure as there are capital capentes] Second furniture (not qualified $250 ar an de ductoble capense] revore expense v Laundry expense green suls $ 200. | |ТТІ Bus pees parking penalty [not qualified as deductible expense total copenditure het income of Alex forward $7288 A $ 121,662 ($ 2.000) Со тв (" Tox liable on the Net $ 1,18,662 income of

Notes 2 Since tax slab ratex are not powrided in the queston - we are unable to calculate the net tax payable. Since income as earned from an investment property more application of funds for purchase of another investment propenty is cannot be Considered as application & income and connor be claimed for deductam of the same as expente 6 Dividend income from a listed companies is two exergsted as the companies pays tases already om behalf on their profits out of which dirid as to be distributed e profit tom partnexhip at also exempted from tam as it is already tax paid output to the partner hands. Double taxation happens if the partner pay tore again on his hear there of profet! Since question is silent on many aspect, we considered only to the possible sont out of the matters