MyAssignmentServices uses cookies to deliver the best experience possible. Read more

Case Study: Michael

Answer to Question- 1 :-

ASSESSABLE INCOME FOR THE YEAR ENDED 30.06.2019

 

PARTICULARS

AMOUNT($)

PROFIT FROM OPERATION

 $ 640,000.00

(915000-275000)

 

ADD:RENTAL FROM PROPERTY

 $ 95,000.00

ADD:EXCESS PAYMENT

 $ 40,000.00

LESS:BAD DEBTS

 $ -600.00

ADD:FINE ON INVESTMENT PROPERTY

 $ 5,450.00

LESS:LOAN APPLICATION FEES

 $ -1,570.00

LESS:INTERTEST PAID

 $ -39,000.00

(ASSUMPTION-5.20% ON 750000)

 

ADD:INCOME FROM CAPITAL GAIN

 $ 31,857.50

 

 $ 739,280.00

Assumptions :-

  1. Interest rate on loan taken for buying the rental property is taken as 5.20% P.A.

  2. Income from Capital Gains is taken as 5% of the total capital gains in the Total Assessable Income of an assessee (Kreiser, Butcher, & Jowitt, 2011).

  3. All other expenditure incurred to earn the Income of the assessee is to be deducted from the total assessable income.

  4. Bad debts relating to Current year shall be deducted in computing total assessable income.

  5. Excess payment to a relative of $40000 (i.e., $50000-$10000) shall be added to income of the assessee (Liebman, 2011).

Answer to Question- 2 :-

WHEN GST INPUT CAN BE CLAIMED AS DEDUCTION

CALCULATION OF FBT FOR YEAR ENDED 30.06.2019

 

PARTICULARS

AMOUNT($)

INTEREST FREE LOAN

 $ 500,000.00

LIFE INSURANCE POLICY

 $ 25,000.00

 

 $ 525,000.00

GROSS UP VALUE

 $ 252,379.58

FRINGE BENEFIT TAX

 $ 118,618.40

WHEN GST INPUT CANNOT BE CLAIMED AS DEDUCTION

 

CALCULATION OF FBT FOR YEAR ENDED 30.06.2019

 

PARTICULARS

AMOUNT($)

INTEREST FREE LOAN

 $ 500,000.00

LIFE INSURANCE POLICY

 $ 25,000.00

 

 $ 525,000.00

GROSS UP VALUE

 $ 278,248.89

FRINGE BENEFIT TAX

 $ 130,776.98

Notes:-

  1. At the time where GST can be claimed the value of the total Fringe Benefit Tax; total value of benefit shall be grossed by 2.0802.

The gross up value shall be multiplied by 47% (Rate of Fringe Benefit taxes).

  1. At the time where GST cannot be claimed the value of the total Fringe Benefit Tax; total value of benefit shall be grossed by 1.8868.

The gross up value shall be multiplied by 47% (Rate of Fringe Benefit taxes (System. Et al. 2016).

Answer to Question- 3 :-

CALCULATION OF CAPITAL GAIN/(CAPITAL LOSSES) FOR THE YEAR ENDED 30.06.2019

ASSET

 

 

AMOUNT($)

ANTIQUE

SALE VALUE

 $ 7,500.00

 

LESS:

PURCHASE PRICE

 $ 2,000.00

 $ 5,500.00

FIRST DAY COVER

SALE VALUE

 $ 22,000.00

 

LESS:

PURCHASE PRICE

 $ 500.00

 $ 21,500.00

LOUNGE

SALE VALUE

 $ 14,950.00

 

LESS:

PURCHASE PRICE

 $ 15,000.00

 $ -50.00

INVESTMENT PROPERTY

SALE VALUE

 $ 986,500.00

 

LESS:

PURCHASE PRICE

 $ 345,000.00

 

LESS:

STAMP DUTY

 $ 2,750.00

 

LESS:

INTEREST

 $ 18,800.00

 

LESS:

COMMISSION

 $ 9,750.00

 $ 610,200.00

 

 

 

 $ 637,150.00

Notes :-

  1. Michael’ had certain Assets which he sold on 30.06.2019 which were purchased on 01.12.1999 such as Antique, First Day Cover, Lounge (Seymour, 2019).

  2. Michael’ had sold another property on 01.07.2018 purchased by him on 30.09.2010. Further there were brokerage expenses, Interest Expenditure and the Stamp duty expenses were to be deducted from the total sale value to compute the total Capital gains.

  3. In the Asset Lounge the asset was sold at less than the purchase value resulting in the total capital loss (Arnold, Ault, & Cooper, 2019).

Answer to Question- 4 :-

INCOME TAX DEDUCTION AVAILBALE FOR THE YEAR ENDED 30.06.2019

 

PARTICULARS

AMOUNT($)

PAID RATES & TAXES FOR VACANT LAND

 $ 5,270.00

FRINGE BENEFIT TAX

 $ 118,618.40

OVERALL LOSS FOR PREVIOUS YEAR

 $ 63,000.00

($66000-$3000)

 

EXEMPT INCOME

 $ 16,000.00

COLLECTIBLE CAPITAL GAIN LOSSES

 $ 3,500.00

 

 $ 206,388.40

Notes :-

  1. All the taxes paid by Michael’ can be claimed as deduction while calculating the total deduction.

  2. The Fringe Benefit Tax paid by the assesse can also be claimed as deduction.

  3. The losses for the previous year can be claimed as deduction while computing Total Income of the assesse (McLaren, 2017).

  4. The previous year capital gain losses shall be carry forwarded and can be claimed as deduction for the year ended 30.06.2019.

References

Kreiser, L., Butcher, B., & Jowitt, E. (2011). Toward a More Equitable Tax Treatment of Employee Fringe Benefits: the Australian Experience. Int'l Tax J., 23, 77.

Liebman, L. (2011). Too Much Information: Predictions of Employee Disease and Fringe Benefit System. U. Chi. Legal F., 57. Woellner, R., Barkoczy, S., Murphy, S., Evans, C., & Pinto, D. (2016). Australian Taxation Law 2016. OUP Catalogue.

Seymour, E. (2019). Taxation: strategies for financial planners. Financial Planning in Australia, 383-416.

Arnold, B. J., Ault, H. J., & Cooper, G. (Eds.). (2019). Comparative income taxation: a structural analysis. Kluwer Law International BV.

McLaren, J. (2017). The economic development of northern Australia: A critical review of the taxation benefits and incentives both past and present and the potential taxation options for the future. J. Australasian Tax Tchrs. Ass'n, 12, 1.

Remember, at the center of any academic work, lies clarity and evidence. Should you need further assistance, do look up to our Taxation Law Assignment Help

Get It Done! Today

Applicable Time Zone is AEST [Sydney, NSW] (GMT+11)
Not Specific >5000
  • 1,212,718Orders

  • 4.9/5Rating

  • 5,063Experts

Highlights

  • 21 Step Quality Check
  • 2000+ Ph.D Experts
  • Live Expert Sessions
  • Dedicated App
  • Earn while you Learn with us
  • Confidentiality Agreement
  • Money Back Guarantee
  • Customer Feedback

Just Pay for your Assignment

  • Turnitin Report

    $10.00
  • Proofreading and Editing

    $9.00Per Page
  • Consultation with Expert

    $35.00Per Hour
  • Live Session 1-on-1

    $40.00Per 30 min.
  • Quality Check

    $25.00
  • Total

    Free
  • Let's Start

Get
500 Words Free
on your assignment today

Browse across 1 Million Assignment Samples for Free

Explore MASS
Order Now

Request Callback

My Assignment Services- Whatsapp Tap to ChatGet instant assignment help

Hire Certified Experts
Ask your Question
Need Assistance on your
existing assignment order?