Tax305: Taxation - Comprehensive Assessment Answer

1IDIH

Taxation – Comprehensive Income Tax

Task:

Bruce Lee is a Lawyer with his own legal practice and registered for GST His receipts and payments (not including GST) for the year ended 30 June 2018 are as follows:
Receipts
$
340,000 Professional legal fees
8,000 Income from part-time military service (note 1)
7,000 Dividends received from an Australian resident company fully franked
34,000 Salary received from part-time lecturing at the University

($6,000 in PAYG W)
5,000 Interest on Bank Deposits
10,000 Rental income from an investment property
Payments
$
14,000 Office rent
10,000 Payment to the cleaning contractor
50,000 Salary paid to employee secretary
290 Purchase of new calculator
1,400 Cost of meals and entertainment for himself and clients
1,200 Train fares for travel to and from work
2,200 Rates on family home
900 Electricity for family home
1,000 Tax agent’s fees for preparing tax returns for 2016/2017
2,000 Rates paid on abovementioned investment property
15,000 Interest paid on loan to acquire the investment property
5,000 Cost of painting the investment property immediately after purchasing the

property

1,000 Cost of replacing roof tiles on the investment property after the roof was

damaged in a severe storm in February 2018

15,000 Cost of extending the bathroom in the investment property
Notes
(1) The part-time military income is exempt.
(2) Bruce has a carry forward past year tax loss of $12,000.
(3) Bruce does not have private hospital insurance.