Calculation of Taxable Income and Income Tax Payable Case Study - Accounting and Finance Assignment Help

Assignment Task:

Task:

EMPLOYMENT:
Your client Helga Hemp is the sole director of Sunshine Futures Pty Ltd. The business employs five staff members, including your client who holds the position of managing director. Sunshine Futures analyses financial information and provides investment advice to registered clients.
The payment summary from Sunshine Futures Pty Ltd shows the following:
? ABN 84 111 122 223
? Gross Payments $130,000
? Tax Withheld $38,200
Sunshine Futures also paid $95 a month for your client’s mobile phone account and additional superannuation contributions of $7,800 under a salary sacrifice arrangement. This amount is in addition to superannuation guarantee requirements. The phone payments related to a fixed monthly contract in the employee’s name and payments were made directly to the phone company by the employer.
Your client owns an BMW X5. They purchased the car on 1 July 2019 for $99,000. The car travelled 36,500 kms during the year and your client has indicated that about 80% is work related but they have not kept a log book. Your client pays for all the running costs for the vehicle. During the year these costs included:
Fuel & oil $4,950
Servicing $1,800
Registration $ 960
Insurance $1,900
Tyres $2,400
Excess on insurance claim.
The insurance company paid for the balance of the cost of repairs. $1,750
Car washing $600

DIVIDENDS & INVESTMENTS:
Sunshine Futures Pty Ltd is a large company with two (2) shareholders, your client and their spouse. Your client owns 40% of the issued shares in the company. The shareholders were paid a lump sum of $150,000 in April. They described this payment as a fully franked dividend. The proceeds were used to reduce the line of credit that was taken out to purchase the home in which they live. Interest paid on the home loan for the year was $24,000.

The client also has a portfolio of shares that were inherited from their father. The father passed away on July 15, 2019. On finalisation of the estate the following shares were transferred to your client and the client received notification that all the shares had been transferred on 1 December 2019.

RENTAL PROPERTY: 4/285 Pacific Parade, Bilinga, 4225
The taxpayer owns a unit on the Gold Coast which is rented to their daughter. A contract was entered into to purchase the property on 22 January 2020 for $620,000 and settlement took place on 1 March 2020. The taxpayer’s daughter moved in immediately. She pays rent in advance of $410 each week. The first payment was made on the day she moved in. (HINT: You need to research the issues around renting properties to relatives and include your findings in your workpapers and letter of advice.)
The building was originally constructed in 2005. A quantity surveyor’s report commissioned at the time of purchase shows the construction cost of the unit was $210,000.

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