Taxation Law Exam: Practice Questions and Solutions

Taxation Law exam ( Practice
question)

TABLE OF CONTENTS
QUESTION 1.............................................................................................................................3
QUESTION 2.............................................................................................................................4
QUESTION 3.............................................................................................................................5
REFERENCES...........................................................................................................................8

QUESTION 1
Jo's tax liability for the year ended 30 June 2019
Receipts $
Professional fees
35000
0
Sales of do it yourself wills 35000
Income from part time military services (exempted income) 0
Dividend received from an Australian resident company fully franked 7000
Net salary received from part time job 24000
Interest on bank deposits 5000
Rental income from an investment property 10000
Gambling wins
10000
0
Total
53100
0
Payments
Office rent 18000
Cost of do it yourself 15000
Salary paid to employee secretary 50000
Purchase of new calculator 290
Cost of meals and entertainment for clients 1400
Train fares for travel to and from work 1200
Rates on family home 2200
Tax agent's fees for preparing returns 1000
Rate paid on above mentioned investment property 2000
Interest paid on loan 15000
Cost of painting the investment property after purchase 5000
Cost of extending the bathroom in investment property 15000
Total
12609
0
Gross income
40491
0
Less: Carried forward losses 10000
Net taxable income
39491
0
Tax liability
Income tax payable
15080
6
Medicare levy payable @2% 7898
Income after tax & Medicare levy
23620
6
Marginal tax rate 45%
Working note:
This means for an annual income of $394,910 Jo pay: $