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Question:

The document should be indexed with a separate heading for each category you deem appropriate. Some suggested headings include:

  • Work Related Income
  • Other Income
  • Capital Gains
  • Rental Property
  • Deductions
  • Tax Payable, Offsets & Levies (include all levies and offsets considered, explain why they are or are not applicable and reconcile to the tax return calculation).
Answer:
Assessable Income associated to work

Particulars

Amount in  ($)

Earnings of Spouse

$64000

Compensation from Medical expenditure

$8000

Superannuation

$10000

Total

$82000

According to “section 6-5 of the Income Tax Assessment Act 1997” an individual taxpayer deriving income directly from the employment would be considered for assessment since these income is directly during or in course of employment by the taxpayer (Barkoczy, 2016). Additionally, any form expenditure that is directly related in the course of gaining the taxable income of the taxpayer would be considered as an allowable deduction. In determining the taxable income of the taxpayer in the present context there are three elements that is taken into the considerations they are namely the income of spouse generated from the remunerations, medical compensation and superannuation contribution which an employer makes as the portion of salary sacrifice value. The above stated three elements is viewed as the assessable income the reason behind this is that the remuneration of other half would be considered to be assessable in the hands of the husband (Collins et al. 2015). In addition to these the expenditure that is incurred in the form of medical expenses, compensation received for medical expenses and superannuation would be additionally determined at the time of deriving the taxable income of the individual taxpayer.   

Capital Gains

Capital Gains Worksheet2017

Description

 

 

 

 

 

 

BHP

%

100

SHARES - AUST

 

 

 

Acquisition:

 

 

 

 

 

 

01-06-2016

BHP shares

2,500

12,500

2

1

12,500

Disposal:

 

 

 

 

 

 

01-12-2016

2,500

50,925

 

 

 

 

Cost base

12,500

Frozen

12,500

 

 

 

- Allowable deductions

 

 

 

 

 

 

+ Assessable income on disposal

 

 

 

 

 

 

Assessable Amount

 

 

 

 

 

 

Reduced cost base

0

Gain

 

 

 

 

Discountable (Individual - subject to discount)

38,425

/

 

 

 

 

Frozen Indexation

38,425

/

 

 

 

 

%

100

SHARES - AUST

 

 

 

 

Acquisition:

 

 

 

 

 

 

01-01-2016

CBA

2,000

10,800

2

1

10,800

Disposal:

 

 

 

 

 

 

01-12-2016

2,000

1,51,880

 

 

 

 

Cost base

10,800

Frozen

10,800

 

 

 

- Allowable deductions

 

 

 

 

 

 

+ Assessable income on disposal

 

 

 

 

 

 

Assessable Amount

 

 

 

 

 

 

Reduced cost base

0

Gain

 

 

 

 

Discountable (Individual - subject to discount)

1,41,080

/

 

 

 

 

Frozen Indexation

1,41,080

/

 

 

 

 

COH

%

100

SHARES - AUST

 

 

 

Acquisition:

 

 

 

 

 

 

01-01-2016

COH

1,000

2,900

2

1

2,900

Disposal:

 

 

 

 

 

 

01-12-2016

1,000

1,24,770

 

 

 

 

Cost base

2,900

Frozen

2,900

 

 

 

- Allowable deductions

 

 

 

 

 

 

+ Assessable income on disposal

 

 

 

 

 

 

Assessable Amount

 

 

 

 

 

 

Reduced cost base

0

Gain

 

 

 

 

Discountable (Individual - subject to discount)

1,21,870

/

 

 

 

 

Frozen Indexation

1,21,870

/

 

 

 

 

FLT

%

100

SHARES - AUST

 

 

 

Acquisition :

 

 

 

 

 

 

01-01-2016

FLT

1,000

950

2

1

950

Disposal:

 

 

 

 

 

 

01-12-2016

1,000

32,290

 

 

 

 

Cost base

950

Frozen

950

 

 

 

- Allowable deductions

 

 

 

 

 

 

+ Assessable income on disposal

 

 

 

 

 

 

Assessable Amount

 

 

 

 

 

 

Reduced cost base

0

Gain

 

 

 

 

Discountable (Individual - subject to discount)

31,340

/

 

 

 

 

Frozen Indexation

31,340

/

 

 

 

 

MYR

%

100

SHARES - AUST

 

 

 

Acquisition:

 

 

 

 

 

 

01-01-2016

MYR

10,000

41,000

2

1

41,000

Disposal:

 

 

 

 

 

 

01-12-2016

10,000

12,100

 

 

 

 

Cost base

41,000

Frozen

41,000

 

 

 

- Allowable deductions

 

 

 

 

 

 

+ Assessable income on disposal

 

 

 

 

 

 

Assessable Amount

 

 

 

 

 

 

Reduced cost base

0

Gain

 

 

 

 

Discountable (Individual - subject to discount)

0

/

 

 

 

 

Frozen Indexation

0

/

 

 

 

 

%

100

SHARES - AUST

 

 

 

 

Acquisition:

 

 

 

 

 

 

01-01-2016

TLS

2,000

6,600

2

1

6,600

Disposal:

 

 

 

 

 

 

01-12-2016

2,000

11,500

 

 

 

 

Cost base

6,600

Frozen

6,600

 

 

 

- Allowable deductions

 

 

 

 

 

 

+ Assessable income on disposal

 

 

 

 

 

 

Assessable Amount

 

 

 

 

 

 

Reduced cost base

0

Gain

 

 

 

 

Discountable (Individual - subject to discount)

4,900

/

 

 

 

 

Frozen Indexation

 

 

 

 

 

 

4,900

/

 

 

 

 

 

 
 
Capital gains tax (CGT) schedule 2017

Capital Gains Tax Schedule  2017

Tax file number (TFN)

881156217

 

 

 

Taxpayer's name

Mr Jinal Shah

 

 

 

Australian Business

84 111 122 223

 

 

 

Number (ABN)

 

 

 

 

1

Current year capital gains and capital losses

 

 

 

Capital gain

Capital loss

 

 

 

Shares in companies listed on

A

$

3,37,615

K

an Australian securities exchange

 

 

 

 

Other shares

B

$

L

$

Units in unit trusts listed on

C

$

M

$

an Australian securities exchange

 

 

 

 

Other units

D

$

N

$

Real estate situated in Australia

E

$

O

$

Other real estate

F

$

P

$

Amount of capital gains from a trust

G

$

 

 

(Including a managed fund)

 

 

 

 

Collectables

H

$

Q

$

Other CGT assets and any

I

$

R

$

Other CGT events

 

 

 

 

Total current year

Add the amounts at labels K to R and write

 

 

 

Capital gains

J

$

3,37,615

the total in item 2 label A - Total current year

capital losses.

 

 

 

 

2

Capital losses

 

 

 

Total current year capital losses

A

$

0

 

Total current year net capital losses applied

B

$

0

 

Total prior year net capital losses applied

C

$

0

 

Total capital losses transferred in applied

 

 

 

 

(only for transfers involving a foreign bank branch or permanent

D

$

 

 

establishment of a foreign financial entity)

 

 

 

 

Total capital losses applied

E

$

 

 

Add amounts at B, C and D.

 

 

 

 

3

Unapplied net capital losses carried forward

 

 

 

Net capital losses from collectables carried forward to later income years

A

$

 

 

Other net capital losses carried forward to later income years

B

$

 

 

Add amounts at A and B and transfer the total

 

 

 

 

to label V - Net capital losses carried forward

 

 

 

 

to later income years on your tax return.

 

 

 

 

4

CGT discount

 

 

 

Total CGT discount applied

A

$

0

 

6

Net capital gain

 

 

 

Net capital gain

A

$

3,37,615

 

1J less 2E less 4A less 5D (cannot be less than

 

 

 

 

zero).  Transfer the amount at A to label A - Net

 

 

 

 

capital gain on your tax return.

 

 

 

 

According to the statement made under the “taxation ruling of 95/35” an individual making any form of capital gains under the above stated rulings would be regarded as the capital gains tax (Afik and Lahav 2016). These ruling is particularly associated with the consequences of the consequences of capital gains tax for the receipt of compensation value. As stated under the taxation ruling of “taxation ruling of 95/35” on receipt of compensation by the taxpayer is in respect of the sales considerations made for the assets for the underlying assets. Alternatively, the compensation of the taxpayer would be viewed as the considerations that is received in respect of the sale of the asset.

An important considerations regarding the receipt of compensation is that the taxpayer from the sales amount of the property or from any other source particularly the sale of the underlying assets would be regarded as revenue from the sales and the assets that are dissected would be viewed as compensation (Tan, Braithwaite and Reinhart 2016). As understood from the current situation it can be stated that the transfer of share to the present shareholder on the demise of the actual shareholder would be regarded as the factual owner of the asset.

As evident in the current situation it is noticed that shares are held in six different firms namely, CBA, BHP, COH, MYR and TLS whose sales proceeds will be ascertained depending upon the sales price and the current market value that is reported by the individual taxpayer based on the demise. As held in the case of “Inspector of Taxes v. Bensons Hosiery (Holdings) Pty ltd” the court in its decision have stated that any form of lawful enforceable rights can be converted in asset under the purview of the capital gains tax legislative (Snape and De Souza 2016).

Rental Property

Rental Property Schedule for 2017

Address of Rental Property 4/285 Pacific parade

Bilinga QLD 4225

Date property first earned rental income 01/03/2017

Number of weeks property was rented this year 40

Private Use %

Ownership % owned

Jinal Shah Shah0001 100.00

Income Return

Gross rental income 400 400

Other rental related income

Gross Rent 400 400

Expenses Total Prv % Return

S Stationery, telephone and postage Shah0001 17,195 17,195

N Legal fees Shah0001 1,240 1,240

E Body corporate fees Shah0001 1,000 1,000

H Council Rates Shah0001 900 900

U Water charges Shah0001 350 350

K Insurance Shah0001 685 685

L Interest on loans Shah0001 7,600 7,600

Q Repairs and maintenance Shah0001 699 699

Total expenses 29,669 29,669

Net Rent 29,269 / L 29,269 / L

Tax payable, offsets and Levies

Individual Tax Offsets-2017

Taxpayer Spouse

Taxable Income 0 64,000

Adjusted Reportable Fringe Benefits 605 0

Reportable Super Contributions 10,000 0

Exempt Pensions or benefits 0 0

Target Foreign Income 0 0

Net Financial Investment Losses and Rental Property Losses 146,226 0

Less - Child Maintenance expenditure 0 0

Adjusted Taxable Income 156,831 64,000

Depreciation Worksheet

WORKSHEET OF DEPRECIATION-2017

Title Building

Transfer to

Private Use % (default private use % for this worksheet)

Instant Asset Write-Off

01/01/2017 Building 140,000

01/01/2017 Stove 750

01/01/2017 HotWater system 850

01/01/2017 Carpet 3,750

01/01/2017 Dishwasher 700

01/01/2017 AC 1,200

01/01/2017 Window curtains 2,700

01/01/2017 Refrigerator 990

01/01/2017 Washing machine 1,800

Total 152,740

Depreciation can be defined as the wear and tear of the obsolete asset where the transactions of non-current in nature would be incorporated in the books of accounts of the individual taxpayer (Braithwaite 2017.). The total value of depreciation is regarded as the cost of the assets. In the present context the instant write off procedure has been adopted by the individual taxpayer in determining the overall value of depreciation which is deducted from the overall amount of tax liabilities that takes place during the accounting year.

 
References:

Afik, Z. and Lahav, Y., 2016. Risk Transfer Valuation in Advance Pricing Agreements Between Multinational Enterprises and Tax Authorities. Journal of Accounting, Auditing & Finance, 31(2), pp.203-211.

Barkoczy, S., 2016. Foundations of Taxation Law 2016. OUP Catalogue.

Braithwaite, V. ed., 2017. Taxing democracy: Understanding tax avoidance and evasion. Routledge.

Collins, M., Talley, D. and Smith, R.T., Black Knight IP Holding Company LLC and Black Knight IP Holding Co LLC, 2015. System for estimating property taxes. U.S. Patent Application 14/525,591.

Snape, J. and De Souza, J., 2016. Environmental taxation law: policy, contexts and practice. Routledge.

Tan, L.M., Braithwaite, V. and Reinhart, M., 2016. Why do small business taxpayers stay with their practitioners? Trust, competence and aggressive advice. International Small Business Journal, 34(3), pp.329-344.

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