Question

Karl Kruger is a 38 year-old single Australian resident taxpayer. During the 2017/18 tax year, Karl received and retained the following records:

Account Summary received from XYZ Bank
Interest from Term Deposits	$ 17,200
Interest from Savings Account	350
Bank Charges relating to Term Deposits	40
Interest charged on line of credit (used for personal expenses)	715
4 February 2018 Dividend Statement from Eccy Ltd
Franked Dividend	2,100
Franking Credits	900
Rental Summary from Hawkeye Real Estate
Gross Rent Received	15,200
Rental expenses:
Agent’s Commission	920
Council Rates	1,490
Landlord Insurance	290

Other Information:

• Karl’s rental property was built in 1999 when total construction costs of $200,000 were incurred. Karl has owned and leased the property since 2009.
• Karl made mortgage repayments on his rental property of $20,000, of which $12,100 was principal.
• Karl also sold the following assets during the year:

ASSET	PURCHASE COST	ACQUISITION DATE	DISPOSAL DATE	SALE PRICE
Quality shares	$12,000	12 Apr 12	10 May  18	$18,600
Oil Painting (collectable)	6,000	03 Mar 98	26 Feb 18	5,200
Crummy shares	4,000	21 Aug 08	03 May 18	2,500

require : Prepare a statement calculating Karl’s tax payable/refundable.

Answer 1

Answer- Statement calculating Karl's tax payable/refundable is as follows:

Particulars	Quality shares	Oil painting	Crummy shares
Sales price	18600	5200	2500
Less; Purchases cost	12000	6000	4000
Capital Gian	6600	-800	-1500
Gross capital gain			6600
Less; Gross capital loss			-2300
Capital GAIN			4300
Less; 50% discount			2150
Net capital gain			2150
Calculation of taxable income
Particulars	Amount $	Amount $	Reasons
Interest from term deposits		17200
ADD;Interest from savings account		350
Less; Bank charges for TD		-40	Expense for earning interest income are allowed as deduction.
Interest charged online credit (used for personal expenses)		0	Deduction for interest on your personal tax debt is not allowed.
Total		17510
Franked dividend		2100
Gross rent received	15200
Less;
Agents commission	920
Council rates	1490
Landlord insurance	0		Expense in relation to insurance for landlord is not allowed as deduction from rental income.
Interest on mortgage for rental property	7900
Total	10310
Rental income		4890
Net capital gain income		2150
Total taxable income		26650
Calculation of Karl’s tax payable or refundable for the 2017-18 tax year
0-$18200	0
$18201-$26650	19%
Tax liability		1605
Less; franked credit		900
Tax payable		$705