Tax and Income
Q _ Tran Nam Quan: Blue
Bui Minh Tri
Quy :
Task 1:
Which of the following items are income:
Rent from a residential rental property rented by a young family? yes, ordinary income under sec. 6-5
A birthday gift ? No
A dividend from BP? Yes, Statutory income under sec.44(1) ITAA 1936
Wages and Salaries from your employer? Yes. Ordinary income under sec 6-5
Bank Interest Received? Yes, Ordinary income under sec 6-5(2)
Your boss takes you out to dinner? No
An allowance paid for your car.
Yes. The payment of the motor vehicle allowance – this allowance is generally made to cover the expected deductible costs associated with the business usage of the employees vehicle. This allowance is effectively assessable income to the employee in their tax return. (sec.15-2)
Task 2:
Mike’s taxable income for the year ended 30 June 2012
Taxable Income = (Assessable Income – Deductions)
Assessable Income
§ Wages RMIT under sec.6-5 ITAA 1997 $60,000
§ Interest income under sec.6-5 ITAA 1997 $2,000
§ Dividends received from Telstra Ltd (unfranked) under sec.44(1) ITAA 1936 $3,000
Minus
§ Deductions relating to RMIT (stationery etc) $2,000
Equal
Taxable Income: $63,000.
Tax Payment = 4,650 + 30% * (63,000 - 37,000) = $12,450. wm: a few comments made but good work guys
Task 3:
Kelly, paints a house for John and he charges John $5,000. Kelly tells John to pay the $5,000 to his brother Nathan as he does not want to pay tax on the $5,000. Comment on this strategy.
The legal issue is whether Kelly has to pay tax on the $5,000 received by his brother Nathan?
In the section 6-5(4) of the ITAA (1997), the income is recognised as
Bui Minh Tri
Quy :
Task 1:
Which of the following items are income:
Rent from a residential rental property rented by a young family? yes, ordinary income under sec. 6-5
A birthday gift ? No
A dividend from BP? Yes, Statutory income under sec.44(1) ITAA 1936
Wages and Salaries from your employer? Yes. Ordinary income under sec 6-5
Bank Interest Received? Yes, Ordinary income under sec 6-5(2)
Your boss takes you out to dinner? No
An allowance paid for your car.
Yes. The payment of the motor vehicle allowance – this allowance is generally made to cover the expected deductible costs associated with the business usage of the employees vehicle. This allowance is effectively assessable income to the employee in their tax return. (sec.15-2)
Task 2:
Mike’s taxable income for the year ended 30 June 2012
Taxable Income = (Assessable Income – Deductions)
Assessable Income
§ Wages RMIT under sec.6-5 ITAA 1997 $60,000
§ Interest income under sec.6-5 ITAA 1997 $2,000
§ Dividends received from Telstra Ltd (unfranked) under sec.44(1) ITAA 1936 $3,000
Minus
§ Deductions relating to RMIT (stationery etc) $2,000
Equal
Taxable Income: $63,000.
Tax Payment = 4,650 + 30% * (63,000 - 37,000) = $12,450. wm: a few comments made but good work guys
Task 3:
Kelly, paints a house for John and he charges John $5,000. Kelly tells John to pay the $5,000 to his brother Nathan as he does not want to pay tax on the $5,000. Comment on this strategy.
The legal issue is whether Kelly has to pay tax on the $5,000 received by his brother Nathan?
In the section 6-5(4) of the ITAA (1997), the income is recognised as