You are to calculate the income tax payable/refundable for Betty for the 2018 income year based on the following information.

You are to show all workings out, including the use of indexation and discount methods where appropriate for comparison. CGT asset treatment needs to be fully explained for each asset.

Item 1:

Betty buys a block of land on 10 January 1992 for $100,000. The legal costs associated with the purchase amounted to $900.

She incurs the following expenditure on the land:

10 March 1992                   Connection of services (water, electricity etc.)     $3,000

20 February 1996              Construction of fences                                            $3,500

10 Jan 92 to 10 Nov 17      Total municipal rates paid                                    $12,650

          

She sells the land for $225,000 on 10 November 2017, incurring selling expenses of $1,960.

Item 2:

Betty also sells the following assets:

ITEM                                  DATE OF       COST          DATE OF      DISPOSAL

                                           AQUISITION                      DISPOSAL   PROCEEDS

(1)1972 Porsche car          15/4/99         $16,000        01/09/17       $125,600                          

(2)Principal residence        02/12/93       $112,000      01/10/17       $485,650

(3)ANZ shares                   02/05/87       $1,000         10/12/17       $10,980

(4)Stamp collection            02/12/03       $16,000        10/04/18       $11,500

(5)Caravan                         12/07/97       $16,500        01/05/18      $12,000

(6)Antique table                 01/09/83       $1,800          03/06/18       $12,500

Other Income:

Gross wages from Australia (PAYG Withheld $13,400)      $65,000

Gross Wages from China (Tax Withheld $4,000)                $30,000

Interest Income                                                                    $     550

Fully Franked Dividend                                                        $     200

Child Maintenance Payments                                               $ 5,200

Deductions:

Deductions relating to Australian wages                              $ 1,500

Deductions relating to Chinese wages                                 $     500

Betty has adequate private health insurance

Answer rating: 100% (QA)

Income Tax Calculation Bettys taxable income for 2018 is 116950 Her tax payable is 1754250 which is ... View the full answer