MAC008: Abhishek is Employed During the Financial Year - Law Assignment Help

Assignment Task :

Task:

 

 

 

Abhishek is employed during the financial year ending 30^th June 2020 as a lecturer at the Universe College in Sydney with a total salary of $100,00 for that financial year plus his employer pays to Unisuper the compulsory superannuation contribution of $9,500. The Universe College also deducted PAYG from his $100,000 pay amounting to $30,000 which they remitted on his account to the ATO.

 

Abhishek had allowable deductions in relation to his employment income of $2,000.

Earlier in his life, on 1^st January 2000, Abhishek had bought a vacant block of land for $250,000 and since that date, he has paid rates and taxes totalling $50,000 on the block of land up to 30th June 2020. His incidental costs in buying and selling the land amount to $40,000.

On the 30^thJune 2020, Abhishek sold the vacant block of land for $400,000.

 

In May 2020, Abhishek decided to take a night off and he got lucky winning $200,000 playing against the Goodluck Casino on the roulette table.

 

Required:

Part a (15 marks)

What is Abhishek’s ordinary income for the year ended 30 June 2020?

 

Part b (15 marks)

What is Abhishek’s statutory income (that is the net Capital Gain) for the year ended 30 June 2020?

 

Part c (15 marks)

What is Abhishek’s total taxable income for the year ended 30 June 2020?

 

You must give reasons for your answer. Your discussion must include an analysis of the pertinent sections of the relevant legislation, rulings, and the relevant case law.

Where relevant, you must show your calculations. 

You must apply the law to the facts and provide YOUR OWN analysis of the issues and write a comprehensive answer to the question

 

 

 

 

 

 

Part a (15 marks)

What is Abhishek’s ordinary income for the year ended 30 June 2020?

 

[Answer and show working here]

Income for year ended June 30 2020 Assessable income: Salary as lecturer -sec 6-5 ITAA 1997                      $100000 Superannuation - according to sec 15-2(3)                   it is not included as part of taxable income Money win from Good luck casino -sec 5 H (1)        $200000 Proceeds from sale of vacant block of land                  it is not included as it is a capital gain   Total ordinary income = $300000

 

 

Part b (15 marks)

What is Abhishek’s statutory income (that is the net Capital Gain) for the year ended 30 June 2020?

 

[Answer and show workings here]

Capital proceeds from vacant block of land                                  $400000 Cost base Includes: Purchasing cost  of land                                            $250000 Paid taxes and rates                                                    $50000     Incidental costs                                                        $40000 Total                                                                                          ($340000) Net capital gains                                                                         $60000

Part c (15 marks)

What is Abhishek’s total taxable income for the year ended 30 June 2020?

 

 [Answer and show workings here]

Assessable income: Salary                                                                         $100000 Total assessable income                                                                     $100000 Less: Deductions Allowable deductions                                                                          ($2000) Taxable income                                                                                    $98000 BITL                                                                                                      $23757 LITO and LAMITO                                                                                 $0 PAYG                                                                                                     $30000 Net tax refundable                                                                                  $-6243

 

 

 

QUESTION 2                                                                                                 15 MARKS

 

Videen Pty Ltd is an Australian resident private company.  All the shares in Videen Pty Ltd are owned by Ellie.

 

During the year ended 30 June 2020 the following events occurred in relation to Videen Pty Ltd:

 

Required:

For the year ended 30 June 2020:

 

1. Prepare the franking account for Videen Pty Ltd. (5 Marks)

 

2. Calculate the over franking tax (if any) that Videen Pty Ltd is liable to pay (5 Marks)           

 

3. Calculate the franking deficit tax (if any) that Videen Pty Ltd is liable to pay (5 Marks)

You must give reasons for your answer. If relevant, you must show your calculation.
You must apply the law to the facts and provide YOUR OWN analysis of the issues and write a comprehensive answer to the question

 

 

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