CASE STUDY -

PERTH 4

Tim Wong is a single resident taxpayer who is employed as a golf professional by Myrtle Hill Golf Club. Tim also holds investments

including shares and real estate and has provided details of transactions that he believes relate to the 2023 income year.

You are required to provide the following information to assist with the preparation of Tim's 2023 income tax return:

PART A

Calculate Tim's Net Capital Gain.

Identify the relevant section reference for any exemption or exclusion.

Clearly outline all steps in the calculation.

PART B

Calculate Tim's Assessable Income.

Identify the relevant section reference for each inclusion or exclusion.

Clearly show all necessary workings.

PART C

Calculate Tim's Allowable Deductions.

Identify the relevant section references for each inclusion or exclusion.

Clearly show all workings.

Apply any available alternatives to obtain the maximum deduction available.

PART D

Calculate Tim's net tax payable or refund due.

Clearly show all workings.

RECEIPTS DURING 2022/23

DATE

DESCRIPTION

$

NOTES

FULL YEAR

Net Salary

79,200

PAYGW totalled $ 21,300

FULL YEAR

Rent from property in Albany

20,800

Includes $2,800 of rent paid in advance for July & August

2023

FULL YEAR

Clothing allowance

4,800

FULL YEAR

Part-time wages - Air Force reserves

8,000

22/07/22

Dividend from Ordinary Ltd

980

40% franked at 30% tax rate

29/09/22

Reimbursement of work travel expenses

2,100

29/10/22

Proceeds from sale of shares in Hesitant Ltd

18,400

Originally purchased in 2015 for $10,500

26/11/22

Dividend from Exceptional Ltd

9,100

Fully franked at 30% tax rate

14/01/23

Proceeds from sale of vacant land

200,000

Originally purchased in 2018 for $240,000.

Sold to daughter to build home.

Market value upon disposal $370,000

19/04/23

Proceeds from sale of shares in Front Foot Ltd

7,500

Purchased in July 2022 (refer to payments)

28/06/23

Proceeds from sale of antique

2,000

Purchased in 2016 for $400

OTHER INFORMATION

a)

On 1 June 2023, Tim gave his car to his niece. The car had cost Tim $18,000 in 2020 and had a market value of $12,500.

b)

Tim had $57,300 of capital losses brought forward from 2020 relating to the sale of shares in Tanked Ltd that had performed

badly.

c)

As at 30

th

June 2023, Tim became entitled to a bonus of $4,000 for workplace performance which he elected to have paid directly

into his mother's bank account.

PAYMENTS DURING 2022/23

DATE

DESCRIPTION

$

NOTES

FULL YEAR

Private Hospital Insurance Premiums

4,600

Reduced premium option taken

FULL YEAR

Sunscreen for sun protection at work

180

No receipts kept; Each bottle of sunscreen cost Tim $6

FULL YEAR

Purchases of golf balls

4,200

Entirely work related

FULL YEAR

Income activity statement instalments paid

12,500

PAYGI

09/07/22

Payment for knee reconstruction

8,700

Necessary to allow Tim to continue working as golf

professional

31/07/22

Purchase of shares in Front Foot Ltd

5,900

Sold in April 2023 (refer receipts)

26/10/22

Purchase of golf shirts (required by Myrtle Hill GC)

3,500

Standard polo shirts by sportswear company

01/11/22

Repair of golf clubs

300

01/12/22

Replacement of motor in golf cart used for work

3,000

Expected to last a further 5 years

15/12/22

Payment of annual building insurances

4,400

50% related to his Albany property and the remainder

to his private residence.

01/03/23

Completed extensions to rental property townhouse

20,000

09/05/23

Speeding fine incurred on the way to a client

650

OTHER INFORMATION

a)

Tim used his private car for work related travel of 7,200 kilometres during the year, mostly to conduct lessons and clinics. He did

not maintain a logbook.

b)

Tim incurred interest of $23,000 during the year on a portfolio loan. $9,500 related to his private residence, $2,500 to shares

purchased, and $10,000 to the Albany proper