Professional Practice Taxation Exam: UOW, Income Tax & GST

This document provides solutions to a professional practice taxation exam, covering various aspects of income tax assessment, capital gains, and GST calculations. It includes calculations for capital gains on rental properties, antique jewelry, holiday homes, apartments, and Bitcoin, as well as the calculation of overall taxable capital gain/loss. The document further details Corina’s taxable income and tax payable, referencing the Income Tax Assessment Act 1936 and its implications on tax loss transfers. Additionally, it addresses partnership tax adjusted profit and GST payable on cash sales and purchases. Desklib offers a wide range of past papers and solved assignments to support students in their studies.

Professional practice taxation
(Online exam)

TABLE OF CONTENTS
MAIN BODY...................................................................................................................................3
Question 1...................................................................................................................................3
Question 2...................................................................................................................................5
Question 3...................................................................................................................................5
Question 5...................................................................................................................................6
Question 6...................................................................................................................................6
REFERENCES................................................................................................................................8

MAIN BODY
Question 1
Calculation of capital gain
Rental house
Cost inflation Index
Index of current year/ index of base
year
2.19
Indexed cost of purchase CII*purchase price
722700
purchase price 250000
Building small flat 80000
Total cost 330000
selling price 580000
capital gain/ loss
-
142700
2
antique jewelry
Cost inflation Index
Index of current year/ index of base
year
2.19
Indexed cost of purchase CII*purchase price
26280
purchase price 12000
Selling price 17000
capital gain -9280
3
car
4
holiday home
Cost inflation Index
Index of current year/ index of base
year
2.61
Indexed cost of purchase CII*purchase price

600789
purchase price 230000
sales price 780000
capital gain 179211
5
apartment
Cost inflation Index
Index of current year/ index of base
year
1.69
Indexed cost of purchase CII*purchase price
676386
purchase price 400000
selling price 1500000
capital gain/ loss 823614
6
bitcoin
Cost inflation Index
Index of current year/ index of base
year
1.05
Indexed cost of purchase CII*purchase price
57677.7
purchase price 55000
selling price 45000
capital gain/ loss -12678
2. Calculation of overall taxable capital gain/ loss
Overall capital gain or
loss
capital gain/ Loss 838167
Question 2
Calculation of Corina’s taxable income and tax payable/ refundable

Assessable income 140000
Less: allowable deduction
PAYG withholding 50000
Work related deduction 2000 52000
Add:
Trust income 25000
Rental income 36000
113000
Less:
Carried forward capital loss 45000
Donation 2000
Registered tax agent 750
Annual maintenance 2400
Interest cost 9600
Taxable income 53250
Tax rate 32.50% 17306.3
Net tax payable 17306.3
Question 3
Income tax assessment act 1936 under the Parliament of Australia which provides
guidance regarding the calculation of tax. In the mentioned case of buying all shares of Junior
Ltd. that is concerned with transferring tax loss for gaining zero taxable income. The mentioned
course of act IVA that is generally concerned with the general anti avoidance rule for the income
tax. In addition to this, it protects they integrity of person income tax system by ensuring that
arrangements to obtain tax benefit will adversely affect.
In the case of giving advice to transfer the tax loss can become possible as in Australia it
is allowed to carry forward tax loss by maintaining the majority ownership and control. It can be
possible if the Mr X carries the business in same industry (Shaw,2021). In addition, this, Trust
cannot distribute the losses incurred for beneficiaries. From the evaluation it can be identified
that t the mentioned act of ITAA 1936 allows the organization to remove or reduce the tax effect
of certain transactions (Tax Counsel Pty Ltd, 2021). Following this advice of Tina organization
will be capable of having smooth proce4ssing and functioning. In the mentioned case, the

mentioned part IVA can be applied to get the benefits from managing tax related transactions. It
will facilitate the firm to reduced taxes and have proper functioning.
Question 5
Ada Bell Carol total
Partnership tax adjusted
profit 108000
Salaries
40000 40000
interest 30000
cash dividend 2100 1400 3500
excess amount 32400 21600 54000 108000
tax rate 4860 3240 8100 16200
Question 6
1 Calculation of GST payable
For cash sales
GST = P * 10 %
P= 44000
GST= 44000 * 10 %
GST = 4400
GST Claim on cash purchase
GST = P * 10 %
9900 * 10 %
GST = 990
2
The total of gross taxable value is 18000
Total of employee contribution is 400
So that taxable value of the benefit is 17600

That is 18000 – 400.

REFERENCES
Books and Journals
TaxCounsel Pty Ltd, 2021. Tax news-the details. Taxation in Australia. 55(10). pp.509-513.
Shaw, A., 2021. Tax files: Allocation of professional firm profits to individual
practitioners. Bulletin (Law Society of South Australia). 43(4). pp.24-25.