Taxation Law and Accounting: Assessment on Tax Calculations

This document presents a comprehensive TAX assignment solution, meticulously detailing various tax calculations and deductions. The assignment covers a range of scenarios, including the calculation of income tax liability for individuals, incorporating gross wages, dividends, interest, and allowable deductions such as uniforms, investment journals, and other relevant expenses. It further explores the calculation of deductions available to business owners, including depreciation on assets like espresso machines, pizza ovens, and motor vehicles. The assignment also includes case studies analyzing taxable income, capital gains, and tax offsets, providing a holistic understanding of taxation principles. Calculations for capital gains tax, tax payable, and the application of tax offsets like the Parent Tax Offset, LITO, and medical expenses tax offset are also included. The solution demonstrates the application of relevant tax laws and regulations to real-world scenarios, offering a valuable resource for students studying taxation and finance.

Running head: TAX
Tax
Name of the Student:
Name of the University:
Authors Note:

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Table of Contents
Assessment 1...................................................................................................................................2
Task 1...........................................................................................................................................2
Task 2...........................................................................................................................................3
Assessment 2...................................................................................................................................4
Case study 1.................................................................................................................................4
Case Study 2................................................................................................................................5
Case Study 3................................................................................................................................6
Case Study 4................................................................................................................................6
Assessment 3...................................................................................................................................7
Question 1....................................................................................................................................7
Part A...........................................................................................................................................7
Part B...........................................................................................................................................8
Question 2....................................................................................................................................9
Question 3....................................................................................................................................9

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Assessment 1
Task 1
Ryan's Statement showing calculation of Income tax Liability
Particulars Amount Amount
Gross Wages $ 78,800.00
70%franked dividend from F/S Ltd-amount received $ 2,900.00
Franking credit $ 870.00
Gross Dividend $ 3,770.00
Honorarium for duties as president of the swim club $ 350.00
Unfranked dividend from Back Ltd $ 1,750.00
Fully franked dividend from F/S Ltd-amount received $ 3,300.00
Franking credit $ 1,414.29
Gross Dividend $ 4,714.29
Bank interest $ 103.00
Tax deducted $ 97.00
Gross bank interest $ 200.00
Assessable Income $ 89,584.29
Deductions
Purchase of compulsory uniform $ 480.00
Laundry of uniform(estimate) $ 75.00
Investment journals $ 230.00
Sunglass used for driving $ 150.00
Total Allowable Deduction $ 935.00
Taxable Income $ 88,649.29
Income Tax Liability (17550+(88649-80000)X37%) $ 20,750.24
Medicare Levy (88649X1.5%) $ 1,329.74
Medicare Levy Surcharge (88649X1%) $ 886.49
HELP Repayment (less of 6600 or 8% of 88649) $ 6,600.00
$ 29,566.47
Less:
Franking Credit $ 2,284.29
TFN tax deduction $ 97.00
PAYG Withheld $ 20,500.00
$ 22,881.29
Net Tax Payable $ 6,685.18

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Task 2
Allowable deduction
Statement Showing calculation of deduction available to Hayden
Particulars Formula Amount
Espresso Machine (4,410/5) x 2 $ 1,764
Pizza Oven (15,753/10) x 2 $ 3,151
Nissan 60% for business
(26,917/8) x (2) x (9/12)
x (0.6) $ 3,028
Adjustment of balance
(26,917-3,028) = 23,889
- 25,000 $ (1,111.00)
Motor vehicle (57,466/8) x (2) x (3/12) $ 3,591.63
Cash Register (1,400/8) x (8/12) x (2) $ 233
New tables and chairs (2,800/5) x (2) x (6/12) $ 560.00
Construction Capital Works
(11,500 x 0.025) x
(7/12) $ 167.71
Low Value Pool (990+163+47) $ 1,200.00
Total Allowable deduction $ 12,584
Statement showing calculation of Low value pool assets
Particulars Formula Amount ($)
Opening balance 2640
Add:
Ceiling Fan 870
I Phone 4S 250
Less:
Decline in value 2640X37.5% -990
Ceiling Fan 870X18.75% -163
I Phone 4S 250X18.75% -47
Sales proceed -230
Closing Balance 2330

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Assessment 2
Case study 1
Statement showing calculation of Taxable Income of Dave
Particulars Amount Amount
Assessable Income
Sales of Instruments $ 449,000.00
Tuition Fees $ 55,450.00
Refundable fees $ (11,000.00)
Net tuition Fees $ 44,450.00
Interest from personal account $ 494.00
Insurance recovery $ 20,800.00
Sale of sheet music $ 1,420.00
Increase in Stock $ 12,000.00
Total Assessable Income (A) $ 528,164.00
Deductions
Rent of shop premises paid $ 28,000.00
Advance paid $ 4,000.00
Net rent paid $ 24,000.00
Purchases $ 180,000.00
Advertising $ 4,600.00
Superannuation for self $ 12,000.00
Wages to employees $ 22,500.00
Disallowed by Commissioner $ (12,500.00)
Allowable wages $ 10,000.00
Lease of delivery Van $ 45,000.00
Van running costs $ 14,550.00
Electricity & Telephone $ 4,900.00
Gift to school building fund $ 444.00
Insurance for contents of shop $ 490.00
Tax Agent $ 550.00
Legal Fees and stamp duty on business loan $ 167
Interest on business loan $ 3,400.00
Total Allowable Deduction (B) $ 300,101
Taxable Income (A-B) $ 228,063

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Case Study 2
Statement showing calculation of Taxable Income
Particulars Amount Amount
Assessable Income
Rent Income (including agents fees) $ 69,450
Rent received $ 1,640
Water rates recouped $ 1,040
Unpaid rent recovered (13400-10400) $ 3,000
Cost of Freehold land $ 420,000
Cost of Acquisition $ (140,000)
Additional expenses $ (15,450)
Gross Capital Gain $ 264,550
Less: Discount $ 132,275
Net Capital gain $ 132,275
Total Assessable Income (A) $ 207,405
Deduction
Water & Council Rates $ 3,200
Cleaning $ 740
Agents Fees $ 5,200
Building insurance $ 380
Repairs and Maintenance $ 4,400
Decline in Value Fixtures and Fitting $ 1,200
Painting of Harbord property $ 1,800
Travel to inspect properties $ 2,057
Strata Levy $ 2,400
Bank Charges $ 140
Total Allowable Deduction (B) $ 21,517
Taxable Income (A-B) $ 185,887.80

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Case Study 3
Statement showing calculation of Taxable Income of Jenny Gold
Particulars Amount Amount
Salary (Net) $ 59,570.00
Add: PAYG $ 10,430.00
Gross Salary $ 70,000.00
Redundancy payment $ 64,495.00
Long service leave $ 21,039.00
Annual leave $ 6,388.00
Superannuation lump sum benefit (taxed) $ 150,000.00
Taxable Income $ 311,922
Tax payable (54550+45%X(311922-180000) $ 113,914.90
Medicare Levy (311922-150000)X1.5% $ 2,428.83
$ 116,343.73
Less: Tax offset lump sum $ 81,462.55
$ 34,881.18
PAYG (10430+12200) $ (22,630.00)
Tax Payable $ 12,251.18
Case Study 4
Statement showing calculation of Operating Cost
Particulars Amount
Fuel $ 5,200.00
Insurance $ 920.00
Registration $ 350.00
Service/Repairs $ 1,040.00
Value decline (28200/8X200%) $ 7,050.00
Total operating cost $ 14,560.00

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Statement showing usage percentage
Particulars Amount
Salon to home $ 3,150.00
Home to salon $ 3,150.00
Salon to college $ 1,840.00
College to home $ 2,147.00
Other private travel $ 5,632.00
Travel to conference $ 900.00
Total $ 16,819.00
Work Related percentage (1840+900/16819) 16.29%
Calculation of Maximum Available deduction
Particulars Amount
Log book (14,560 x 16.29%) $ 2,372
One third Operating cost (14,560/3 ) $ 4,853
12% Original Cost (12% x 36,200) $ 4,344
Cents per km ( 5,000 km x 0.74 ) $ 3,700.00
Maximum Deduction $ 4,853.33
Assessment 3
Question 1
Part A
Statement showing calculation of Capital gain
Particulars Amount Amount
Gain on sale jeweler $ 3,900.00
Loss on sale of rare coin $ (850.00)
Loss on sale of painting $ (1,000.00)
$ 2,050.00
Gain on holiday house $ 120,000.00

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Gain on shares $ 1,500.00
Loss brought forward $ (9,000.00)
$ 112,500.00
Gross Capital Gain $ 114,550.00
less: Discount @ 50% $ 57,275.00
Net capital gain $ 57,275.00
Part B
Statement showing calculation of Capital gain
Particulars Amount Amount
Boat
Sales proceed $ 15,500.00
Cost $ 14,400.00
Gain on sale of boat $ 1,100.00
Investment property
Sales proceed $ 350,000.00
Cost $ 220,000.00
Gain on sale of Investment property $ 130,000.00
Shares in Angela Ltd
Sales proceed $ 1,500.00
Cost $ 4,000.00
Loss on sale of shares $ (2,500.00)
Shares in Louise Ltd
Sales proceed $ 12,000.00
Cost $ 2,200.00
Gain on sale of shares $ 9,800.00
Gross Capital gain $ 138,400.00
Less:
Discount @50% ( 138,400 - 7,300 ) x 50% $ 65,550.00
Net Capital gain $ 72,850.00

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Question 2
Statement showing Calculation of Tax offset
Particulars Amount Amount Amount
Parent Tax Offset (1,726 - (5,011-282/4) $ 544
MAWTO $ 500.00
LITO 1,500-(54,400 - 30,000 x 0.04) $ 524.00
Medical Expenses Tax Offset
Mack ( 220 + 2,200) $ 2,420.00
Jill ( 280 + 420 + 350 + 400 ) $ 1,450.00
Terry ( 125 + 80 ) $ 205.00
Beatrice ( 400 + 95 ) $ 495.00
Mitch ( 220 + 1,230 + 330 ) $ 1,780.00
$ 6,350.00
( 6,350 - 2,060 ) x 20% $ 858.00
Total tax Offset $ 2,426
Question 3
Statement showing Calculation of Tax Payable
Particulars Amount Amount
Taxable Income $ 72,000.00
Tax free threshold (500X6) $ 3,000.00
Income Tax
(37,000 - 3,000 ) x 0.15 $ 5,100.00
(72,000 - 37,000 ) x 0.30 $ 10,500.00
$ 15,600.00
Add Medicare Levy ( 72,000 x 1.5% x 166/366) 489.84
Tax Payable $ 16,089.84

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