In June 2021, two university friends, Axel and Rod, formed a partnership and borrowed $600 000 @ 4% interest per annum to purchase a rental property as joint tenants ("the property"). The partnership agreement that axel would receive an annual salary of $20 ,000 in return for attending to repairs and maintenance on the property and collecting rent. The agreement also provided that the income and losses from the partnership will be split 70% to rod and 30% to Axel.

Soon after then property was purchased, it was discovered that the hot water system was faulty and needed repairs. However, because of the difficulty of finding spare parts it was agreed that it was cheaper and more convenient to replace the original hot water system with an identical system which cost $1,500. The new hot water system, which had an effective life of 10 years, was installed in March 2022 at an additional cost of $200. The purchase price and installation cost were paid from partnership income.

The rental income from the property during the current tax year was $60,000.

During the current tax year Rod earned net salary of $190,433 on which PAYG of $40,567 was paid.

CACLUATE: 

1. The net income/loss from the partnership for the year ended 30 June 2022    

1. The allocation of partnership income/loss to be distributed each Axel and Rod for year ended 30 June 2022. 

1. The tax payable by Axel and Rod.

Answer rating: 100% (QA)

Solution 1 To calculate the net incomeloss from the partnership for the year ended 30 June 2022 I used the following formula Net incomeloss Rental inc... View the full answer