Mary, a New Zealand tax resident, has been a client of yours for some years. She supplies

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Question:

Mary, a New Zealand tax resident, has been a client of yours for some years. She supplies you with the following information regarding her tax affairs for the year ended 31 March 2022. All amounts are in New Zealand dollars.

Mary is a registered nurse employed by the Waite mata District Health Board (WDHB). From this employment she has earned a gross salary of $90,000 from which tax of $20,280 has been deducted.

WDHB had paid Mary $640 during the year for meals when Mary was working overtime. In each case Mary had worked more than 2 hours overtime per day and WDHB paid for overtime meals at the Inland Revenue prescribed rates.

She also paid medical insurance contributions $800 during the year.

The WDH Bhad employed Mary from Inver cargilland paid her a work-related relocation allowance of $8,000 to take up employment with them from 1 April 2021.

Mary has a 20% interest in the Farming Partnership with her former husband. The partnership has a business (tax) loss of $6,000 for the year ended 31 March 2022.

Mary owned shares in the New Zealand registered company. She received $300 gross dividend from the shares during the year ended 31 March 2022. This dividend was 25% imputed and an appropriate amount of RWT was deducted.

Mary earned net interest from the ASB Bank amounting to $134 and the bank deducted RWT @ 33 percent rate.

Mary has a bank account in United States of America (USA) and received in her bank account net interest $225. USA withholding tax rate is 10%.

During the 2022 tax year Mary was selected as a member of the Olympic Games "A" squad and during this year she participated in the Goodwill Games and won prize money totalling NZ$10,000.

In appreciation of her performance at the Goodwill Games she received $850 travel voucher from theWDHB.

In June 2021 Mary received annuities of $7,000 from her grandfather's estate.

She inherited from her grandmother an antique gold watch of $1,500. A friend liked it and offered her $2,500 and she sold it.

Mary is a very talented tailor and from June 2021 decided to spend most evenings making designers face masks that she then sells to the public by placing an advertisement on facebook. Mary had purchased materials costing $16,000 during the year. Mary has made $28,000 gross from the sales of face masks during the year. She estimated thatthe trading stock she held at the end of 31 March 2022 had a cost of around $2,600.

Mary converted one of the bedrooms into a sewing studio, which she uses solely for this purpose. The bedroom room occupies about 10% of the total house. The sewing studio is fitted with a sewing machine. Mary is able to provide you with receipts for house expenses amounting to $24,000 for the year.

On 1 June 2021 she took a long-term loan of $10,000 @5%, which she used to purchase sewing machine (Inland Revenue's DV depreciation rate 25%) to assist in this venture. She also purchased additional furniture for the sewing studio which cost $925.

Mary paid you $400 for preparing her tax return.

Required:

Prepare Mary's IR 3 income tax return for the year ended 31 March 2022, showing all workings and indicating clearly the appropriate taxation treatment of all items 1 - 13 including, statutory references.