Damian is an architect, operating a small practice in Daylesford. During the current tax year, his records indicate:
Receipts:
|
$ |
|
|
115,000 |
Professional architectural fees |
|
10,000 |
Exempt income |
|
30,000 |
Proceeds for sale of shares (see note a) |
|
10,000 |
Proceeds from sale of artwork (see note a) |
|
7,000 |
Dividends received from an Australian public company franked to 50%. |
|
17,000 |
Net salary received for part time work for an accreditation body reviewing membership applications (the body withheld $1,000 in PAYG instalments) |
Payments:
|
$ |
|
|
500 |
Donation to the Red Cross (DGR) in his personal name (not on behalf of his architecture practice). |
|
800 |
Repairs to a window broken in Damian’s reception area earlier in the year |
|
150 |
Speeding ticket received when Damian was running late to a client meeting. |
|
15,000 |
Electricity and rent for the business premises |
Additional information:
|
(a) |
Damian purchased the shares in 2010 for $15,000 and the artwork in 2006 for $400. The artwork had been hanging in the firm’s reception area. Damian also has carried forward losses from prior years from collectables of $5,000. |
|
(b) |
Damian has a carry forward Division 36 past year trading tax loss of $2,000. |
|
(c) |
Damian has private medical and hospital insurance and is eligible for a private health insurance offset of $200. |
REQUIRED
Calculate Damian’s total tax liability for the 30 June of the current tax year. Figures can be rounded to the nearest dollar. All numbers are exclusive of GST.
You should briefly explain your treatment of the items in this question. For example:
Item Explanation $4,000 Conference expense Deductible – s. 8-1, revenue expense incurred in the production of assessable income.
