a) Pipy works as an architect. Her employer provides her a free accommodation on the condition that she can only live there by herself and cannot sublet it to others. The same accommodation costs around $60,000 a year. Is this assessable income of Pipy assume no Fringe benefit tax has been paid by the employer? Explain your answer.

b) Mac operates a petrol station. He enters into an agreement with BP and agreeing to sell BP’s petrol exclusively for 6 years. During these 6 years he cannot sell petrol from any other petrol suppliers. He is paid for $25,000 for signing this agreement with BP. Is it assessable income of Mac? Explain your answer.

c) Betty is a resident JP employed by Bex Ltd. The following transactions were all because of Betty’s employment:

1. Net weekly wages totalled $88,000 for the year.
2. Total PAYG tax withheld from weekly wages from Bex and forwarded to the ATO $20,000.
3. Additional wages paid as a Christmas bonus of $16,000 (net of $6,000 PAYG tax withheld)
4. Reimbursement of out-of-pocket travel cost of $1,100 incurred during employment.
5. A travel allowance totalling $2,100. No PAYG was withheld.
6. Bex paid health insurance premium for Betty and her husband of $3,550
7. Superannuation contributed $15,000 to Bex Super Fund on behalf of Betty.

For each of the transactions indicate which amounts are to be included in Betty’s assessable income.

1. A taxpayer’s assessable income will include any ‘ordinary income’ and statutory income. Are the following items being assessable income or not and explain your answer     
2. Salary and a performance bonus received by an employee.                                                                                                                                                                     Q3 :

   d) Wilson is a single resident taxpayer, had a taxable income of $65,500. PAYG tax withheld from Wilson’s gross wages was $9,000.

   Note that ~ Taxpayers, who earn over $26,668/year, pay a Medicare Levy of 2% of their taxable income.

   Required:

   Calculate Wilson’s tax payable or refund for 2020/2021.

   Taxable Income	Tax on This Income
   0 to $18,200	Nil
   $18,201 to $37,000	19c for each $1 over $18,200
   $37,001 to $80,000	$3,572 plus 32.5c for each $1 over $37,000
   $80,001 to $180,000	$17,547 plus 37c for each $1 over $80,000
   $180,001 and over	$54,547 plus 47c for each $1 over $180,000

Answer rating: 100% (QA)

Ques 3 Solution Taxable Income Assesable Tan 0 1820... View the full answer