QUESTION 13.3 (Rentalproperty,capitalallowances) Alf Ericsson, a resident Australian taxpayer, owns a house in Sydney from which
Question:
Alf Ericsson, a resident Australian taxpayer, owns a house in Sydney from which he derives rental income. During the tax year, Alf had the following transactions in relation to the property:
RECEIPTS | |
Rent Received (net of $940 agent's commission) | $24,660 |
Water RatesRecovered | 515 |
LeasePreparation Fee Recovered | 15 |
PAYMENTS Agents' Commission |
940 |
Letting Fee | 300 |
Lease Preparation Fee | 30 |
BankCharges | 83 |
Mortgage Repayments | 12,800 |
Council Rates | 1,220 |
PAYG tax instalments paid | 4,200 |
Insurance | 410 |
LandTax | 1,93O |
Replacement of broken window (1 May 2022, effective life 5 years)
Air Conditioning (28 February 2022, effective life 10
years)
New Light Fitting (30 April 2022, effective life 5 years) Water Rates
OTHER INFORMA TION
- Mortgage Repayments were made in respect of:
Principal $ 3,200
Interest 9,600
205
2,700
250
920
- On 3O April 2017, borrowing costs of $950 were incurred on the mortgage, which has a term of 20 years.
- Alf wishes to use the Commissioner's estimates of effective life.
In addition, Alf had maintained a schedule from previous years of depreciable assets that he has acquired for the property:
Asset Cost Written Effective Depreciation
(8) Down Va/ue Life Method at 3O/6/2I (years)
Hot Water Service 1,800 1,500
Carpets 3,800 2,9OO
Blinds 1,3O0 1,O5O
12 Prime Cost
10 Diminishing Value
10 Diminishing Value
Calculate Alf's net rental income from the property that he would include as part of his taxable income for the 2021/22 tax year.
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill