Instructions:
This is an individual assignment
o This assignment must be written using MS Word.
o Please type your full name and ID in the space provided
o Please ensure that your submission must be your own original attempt.
o Marks will be deducted for cheating/plagiarism
BAP31 A Taxation Law & Practice 1 Assignment-Universal Business School Sydney Australia.
Student answers and submissions are required to be completed in THIS answer booklet.
o Due date for this assignment
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Question 1
Karen is an Australian resident. She is 50 years of age and born in Ireland. She has decided to sell her Australian assets as she is retiring from her business as a retail owner and going back to Ireland. Karen is selling the following assets:
1.She purchased a home in 1981 for $60, 000 which she used as her main residency. Her home is now worth $100, 000.
2.She purchased a car in 2012 for $25, 000 which is now worth $ 50, 000.
3.Karen started a small retail business herself and now has found a buyer to take over her business for $150,000. The sale price includes $70, 000 for all of the business equipment, which cost $50, 000 and $90, 000 of goodwill.
4.Karen is also selling her furniture for $7, 000. No single item offered for sale cost more than $2, 000.
5.There are also several paintings that she is selling for $35, 000. All of her paintings were purchased in second hand shops and no single painting cost more than $500. The one exception was a painting she purchased direct from an artist for $1,000. This painting is being sold for $5, 000
Based on the above figures, you are required to deal with Capital Gain Tax. You must answer the following questions:
1.What is the Capital gain about the family home?
2.Capital loss or gain incurred from the car.
3.The capital gain related to the business sale.
4.The capital gain after selling furniture.
5.The capital gain concerned with the selling of paintings.
BAP31 A Taxation Law & Practice 1 Assignment-Universal Business School Sydney Australia.
Question 2
Molly and Tim jointly purchased a property for $1,000,000. The investment property generated net annual rental income of $20,000. Molly put in $300,000 and Tim put in $700,000.
Required: Determine the profit/loss allocated to Molly and Tim
Question 3
Jack is a 50-year-old resident from Sydney who is single and employed as a legal practitioner. During the 2018/19 income year, he earned salary of $130,000. He also owned an investment property in Melbourne for which he derived rent of $10,000. Additionally, Jack is a shareholder in a company from which he received franked dividend off $6000. He is also a beneficiary of a family trust and was entitled to $15,000 of the income of the trust estate.
During the income year, Jack undertook a professional development course which costed $800. He also works from home on a part-time basis for which $700 was the depreciation value of the computer that he uses in his study at home for work related matters. He decided to repair the fence of his investment property which costed him $6000 and in the previous income year, he paid $500 to an accountant to prepare his tax return. He had a private health insurance for the whole income year and does not have any outstanding help debt.
Calculate Jacks Income Tax Liability for the 2018/19 income year.
Tax payers, who earn over $26,668/year, pay a Medicare Levy of 2% of their taxable income.
BAP31 A Taxation Law & Practice 1 Assignment-Universal Business School Sydney Australia.
Australian income tax rates between 2018/19 (residents)
Income thresholds Rate Tax payable on this income
$0 – $18,200 0% Nil
$18,201 – $37,000 19% 19c for each $1 over $18,200
$37,001 – $90,000 32.5% $3,572 plus 32.5% of amounts over $37,00
$90,001 – $180,000 37% $20,797 plus 37% of amounts over$90,000
$180,001 and over 45% $54,097 plus 45% of amountsover$180,000
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