Taxation Law Assignment: Partnership and Taxable Income

This document presents a comprehensive solution to a taxation law assignment, focusing on income calculation for a partnership and an individual. The solution begins with a detailed statement calculating the partnership's net income, including gross trading receipts, capital gains, dividend income, and interest income, followed by itemized deductions such as salaries, rent, superannuation, and various expenses. The second part of the assignment calculates the taxable income of an individual, Mary, including assessable income from salary, interest, rental income, and dividends, as well as allowable deductions for rates, electricity, tax agent fees, and medical expenses. The document concludes with a calculation of Mary's total tax payable, including Medicare levy and franking credits. References to relevant sections of the ITAA 1997 and taxation law textbooks are also provided.

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID

1TAXATION LAW
Table of Contents
Answer to question 1:.................................................................................................................2
Answer to question 2:.................................................................................................................4
Reference List:...........................................................................................................................6

2TAXATION LAW
Answer to question 1:
Statement showing Calculation of Income from Partnership
For the year ended 30 June 2017
Particulars Sections
Amount
($)
Amount
($)
Gross Trading Receipts
Section 6-5 of
ITAA 1997 1900000
Capital Gains from sale of shares 20000
Unfranked Portion of Dividend 7350
Interest Income from bank of china 11250
Gross Total Income 1938600
Expenses eligible as deduction:
Salary to Mary 40000
Interest on loan of funds by Mary
Section 8-1 of
ITAA 1997 10000
Salaries to Employees 250000
Rent and Power
Section 8-1 of
ITAA 1997 60000
Superannuation to staff
Section 8-1 of
ITAA 1997 85000
Superannuation paid on behalf of mary Section 8-1 of 25000

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ITAA 1997
Superannuation paid on behalf of sally
Section 8-1 of
ITAA 1997 25000
Purchase of Motor Vehicle
Section 8-1 of
ITAA 1997 120000
Purchase of treadmill and exercise bikes
Section 8-1 of
ITAA 1997 180000
Interest on bank overdraft
Section 8-1 of
ITAA 1997 18623
Long service leave (Paid out)
Section 8-1 of
ITAA 1997 13507
Bad Debts Written off
Section 8-1 of
ITAA 1997 36849
Cost of goods sold (Opening stock + purchases) –
(Closing stock) 200000
GrossTotal Expenditure from partnership
business 1063979
Less: Interest withheld 1250
Less: Franking Credits 3150
Net income of the partnership in the income
year 870221

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Answer to question 2:
Computations of Taxable income of Mary
For the year ended 30 June 2017
Particulars Sections
Amount
($)
Amount
($)
Assessable Income
Gross Salary Section 6-5 of the ITAA 1997 30000
Less: PayG 9000 21000
Australian sourced Interest Income 5000
Australian Sourced Rental Income 10000
Australian Sourced Dividend Income
Fully Franked (Net) 4900
Gross up Franking Credits 2100 7000
Other Income
Refund of medical expenses 2000
Total Assessable Income 45000
Allowable Deductions
Rates on Family Home Section 8-1 of the ITAA 1997 1200
Electricity for family home Section 8-1 of the ITAA 1997 900
Tax agent fees Section 8-1 of the ITAA 1997 300
Rates from Investment Property Section 8-1 of the ITAA 1997 2000
Cost of repairing roof tiles 1000
Medical Expense for Mary 5000
Less: Refund by Government 2000 3000
Total Allowable deductions 8400
Total taxable Income 36600
Tax on taxable income 3496
Add: Medicare Levy 732
Less: Franking Credit 2100
Total Tax Payable 2128

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Reference List:
Barkoczy, S., 2016. Foundations of Taxation Law 2016. OUP Catalogue.
Woellner, R., Barkoczy, S., Murphy, S., Evans, C. and Pinto, D., 2016. Australian Taxation
Law 2016. OUP Catalogue.