FNSACC603 - Implement Tax Plans and Evaluate Tax Obligations - Accounting & Finance Assignment Help

Assignment Task

Task 1 – Special Professionals
Daniel Jones, soccer player, is a special professional whose professional year 1 is 2016/17. Daniel has taxable professional income over the past three years as follows:
Tax Year Taxable Professional Income
2016/17 $62,000
2017/18 $54,500
2018/19 $45,500
During the year ended 30 June 2020, Daniel had the following income and deductions.

Required :
For the year ended 30 June 2020:
(a) Calculate Daniel’s taxable professional income.
(b) Calculate Daniel’s other taxable income.
(c) Calculate Daniel’s net tax payable or refundable.

Task 2 – Tax planning

Mark Archer buys and sells shares as an investor. During the 11 months to 31 May 2020, Mark has received the following income:
-Unfranked Dividends $20,000
-Gross Salary $140,000
Mark has also sold shares during the year ending 30 June 2020 resulting in:
-A gain of $40,000 on the sale of shares in ABC Ltd.
-A gain of $20,000 on the sale of shares in DEF Ltd.
Both of these parcels of shares were originally acquired in the year ended 30 June 2017. He has no income losses or capital losses carrying forward from previous years.
Mark has no other assessable income or deductions and is not expecting to have any other deductions available during the remaining of the year ended 30 June 2020.
As at 31 May 2020, Mark’s remaining shares were as follows:
Shares Date Acquired Cost Current Market Value
NFI Ltd 10.4.2011 60,000 32,000
FOA Ltd 5.1.2012 10,000 14,000
POQ Ltd 20.2.2014 41,000 10,000
DWN Ltd 14.12.2019 56,000 72,000
 

Required:
a) Assuming that it is possible to sell any of Mark’s shares and that the current market values are unlikely to change in the near future, which of the above shares should Mark sell prior to 30 June 2020 to minimise his taxable income? Calculate this minimised taxable income.

b) If Mark wanted to minimise his taxable income, yet continue investing in each of the companies listed, what should he do.

Task 3 – Tax Planning
Rick and Gail Turner have several investment properties that derive rent which are owned and operated by the Turner Family Trust. Rick and Gail also conduct a financial planning business from which they each earn a salary of $145,000.

During the year ended 30 June 2020, the net income of the trust was $64,573. Rick and Gail have six daughters who live with them:

• Ruby, aged 21, who works full-time at a local restaurant and earned wages of $70,000
• Bella, aged 23, who works part-time and earned wages of $25,000
• Melitta, aged 17, who derived income of $69,000 from her work as a full-time jockey
• Isabella, aged 16, who attends school and has no other income
• Tayla, aged 15, also at school but in receipt of $69,000 from part time modelling and television commercials
• Hanna, aged 13, who lost the use of her legs in a traffic accident. Hanna has no other income. Means testing prevents the Turners from receiving a carer’s allowance for her. The trust deed states that all trust income may be either distributed or retained at the discretion of the Trustee.

Each daughter is covered by private health insurance.

Required:
In order to minimise tax on the trust income, who should the Trustee distribute income to, why should they receive it and how much should each beneficiary receive? (in particular, consider the operation of Div 6AA). The family does not wish any of the trust income to be taxed at an effective rate higher than necessary.

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