Prepare Janet Brown's statement of taxable income and calculate her total tax liability (including...

Question

Prepare Janet Brown's statement of taxable income and calculate her total tax liability (including Medicare Levy) for the year ending 30 June 2018. State all calculations and include explanatory notes and supporting schedules, applying legislation and case law.
(15 marks) Prepare a letter of advice on the tax consequences in relation to the legal fees and damages paid by Janet for the year ending 30 June 2018.
(10 marks) Write a short explanatory note to BMA explaining any tax liabilities that may arise in connection with the provision of benefits to Janet Brown. State relevant calculations and applicable legislation.

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Robert · Accepted Answer

ACC3TAX S2 2017 Group Assignment  1
ACC3TAX S2 2017 Group Assignment 
Name of the Student 
Name of the University 
Name of the Lecturer 
09/26/2017
ACC3TAX S2 2017 Group Assignment  2 
Janet Brown’s statement of taxable income and tax liability 
1 
Janet Brown took a loan with BMA worth $400,000 at an 
interest rate of 3% per annum to purchase an investment. Janet 
used $300,000 to buy property and spent the balance on his 
own house $        2,250 
2 
Janet Brown has been using a company car provided by BMA 
which is used for driving to and coming from work. However 
the car is not used for the purpose of client visits. The car has 
been used for the whole year and BMA has covered the costs 
of the car worth $30,000 and Janet paid the petrol bills worth 
$500 $        5,500 
3 
The house which was purchased by Janet Brown as investment 
was rented out at $2,500 per month since 1st September 2017. 
On 1 October 2017 the tenants advised that the roof was 
leaking so Janet spent $22,000 replacing the roof. Further an 
air conditioning unit was installed at additional costs of $4,000 $      22,500 
4 
Sale of Telstra shares for $10,000 and purchased the same in 
2014 for $5,000. Sale of Orica shares which were purchased in 
December 2017 for $10,000, sale value $6,000 $        1,000 
5 
Sale of Babushka Dolls for $5,900 each and the dolls were 
purchased at a costs of $1,000 where the set contained 5 dolls $      17,100 
 Taxable Income $      48,350
ACC3TAX S2 2017 Group Assignment  3 
Note 1 
Under the Australian tax Fringe Benefit Loan Policy, a fringe benefit arises in the scenarios 
where loan is provided to any student by the university, such loans are not exempt and the 
interest rate where charged is lesser than the prevailing statutory rates in the market.

Prepare Janet Brown's statement of taxable income and calculate her total tax liability (including Medicare Levy) for the year ending 30 June 2018. State all calculations and include explanatory notes...

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