Advise Jim and Jane regarding the income tax implications arising from the above facts. HIRAC METHOD

Jim and his wife Jane live in North Sydney. They are both Australian residents for tax purposes. Jim is employed full-time as an air traffic controller and receives a salary of $210,000 per year. Jim also owns shares in a prominent technology company, Corp Co Ltd. Corp Co Ltd is an Australian resident company for tax purposes. During the 2021/22year, he received one dividend from Corp Co Ltd. The dividend was $2,000 franked at 75%.

Jane is a librarian and receives a salary of $90,000 per year. A few years ago Jane also wrote a cookbook which turned out to be very successful, and since then she has been invited to appear on numerous television cooking programs to perform cooking demonstrations. In 2021/22Janereceives $30,000 from performing cooking demonstrations on television. She also entered a television cooking competition ‘Master Cook’ where she won $3000 in Westfield shopping gift cards.

Answer rating: 100% (QA)

STEP 1 The primary legislation governing the income tax in Australia is the Income Tax Assessment Act 1936 Cth ITAA 1936 The ITAA 1936 contains the ge... View the full answer