QUESTION 3 On 1 July 2020, Nook Ltd entered into a contract with Consultant Co Pty...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
QUESTION 3 On 1 July 2020, Nook Ltd entered into a contract with Consultant Co Pty Ltd for the provision of services. Robert Black is the IT technician nominated in the contract and he is a director of Consultant Co Pty Ltd. He generally works from a home office which is 30% of his principal place of residence. The contract specifies that Robert is required to develop a product for use in the Nook's IT system in accordance with functional specifications provided by Nook Ltd. Robert will use Nook Ltd's equipment to develop the product. The contract is for the performance of a specific task that produces an outcome or result, Robert will also be responsible to fix any defects in his work at his own expense. For the year ended 30 June 2021, Consultant Co Pty Ltd received $120,000 as a fee from Nook Ltd and received $40,000 from Cooper IT Pty Ltd. Cooper IT Pty Ltd is a wholly owned subsidiary of Nook Ltd. Consultant Co Pty Ltd paid the following amounts during 30 June 2021. Annual IT registration fees for Robert $10,000 Robert Black's salary $70,000 -Wages for Robert's wife who issues invoices using Xero software $35,000 Interest on the mortgage for principal place of residence $56667 Required • 17 points a) Determine whether the income described would be classified as personal services income (PSI) (2 marks) b) Determine whether the PSI attribution rules apply by considering ALL the steps in the PSI tests (12 marks) c) Calculate Robert's Taxable income (show all workings) (3 marks) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). Save Anseer QUESTION 3 On 1 July 2020, Nook Ltd entered into a contract with Consultant Co Pty Ltd for the provision of services. Robert Black is the IT technician nominated in the contract and he is a director of Consultant Co Pty Ltd. He generally works from a home office which is 30% of his principal place of residence. The contract specifies that Robert is required to develop a product for use in the Nook's IT system in accordance with functional specifications provided by Nook Ltd. Robert will use Nook Ltd's equipment to develop the product. The contract is for the performance of a specific task that produces an outcome or result, Robert will also be responsible to fix any defects in his work at his own expense. For the year ended 30 June 2021, Consultant Co Pty Ltd received $120,000 as a fee from Nook Ltd and received $40,000 from Cooper IT Pty Ltd. Cooper IT Pty Ltd is a wholly owned subsidiary of Nook Ltd. Consultant Co Pty Ltd paid the following amounts during 30 June 2021. Annual IT registration fees for Robert $10,000 Robert Black's salary $70,000 -Wages for Robert's wife who issues invoices using Xero software $35,000 Interest on the mortgage for principal place of residence $56667 Required • 17 points a) Determine whether the income described would be classified as personal services income (PSI) (2 marks) b) Determine whether the PSI attribution rules apply by considering ALL the steps in the PSI tests (12 marks) c) Calculate Robert's Taxable income (show all workings) (3 marks) For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). Save Anseer
Expert Answer:
Answer rating: 100% (QA)
Determining Personal Services Income PSI and Applying PSI Attribution Rules a Personal Services Income PSI Based on the provided information the incom... View the full answer
Related Book For
Introduction To Federal Income Taxation In Canada
ISBN: 9781554965021
33rd Edition
Authors: Robert E. Beam, Stanley N. Laiken, James J. Barnett
Posted Date:
Students also viewed these law questions
-
The client was born and raised in Canada. After obtaining his MBA in 1968, he began working as a consultant. In July 1976, the corporation of which he was a major shareholder entered into a contract...
-
The Cutting Department of Cassel Company has the following production and cost data for July. 1. 2. Production Transferred out 13,500 units. Started 4,100 units that are 60% complete as to conversion...
-
Suppose that inventory at the beginning of the year consists of 5 units of WIDGET01, costing $33. 00 each. During the year, you received three different shipments for WIDGET01 as follows: on January...
-
Write a paper about Business Brief for the Company Executive team on your findings. The company is kroger read how to do a business brief: smallbusiness.chron.com/write-business-brief-3126.html...
-
Explain the difference between isotropic total cross-section and the transport crosssection as in Eq. (5.49). Why transport cross-section is not used in the transport theory? Data From Equation...
-
An electron is fired into one end of the solenoid in Figure P28.66. Viewed along the positive \(x\) axis from a negative \(x\) coordinate, the electron enters from below at a \(65^{\circ}\) angle to...
-
Culver Company sells its product for $165 per unit. Its actual and projected sales follow. All sales are on credit. Recent experience shows that 28% of credit sales is collected in the month of the...
-
6.Max Co is a large multinational company which expects to have a $10m cash deficit in one month's time. The deficit is expected to last no more than two months. Max Co wishes to resolve its...
-
Myles Etter and Crystal Santori are partners who share in the income equally and have capital balances of $210,000 and $62,500, respectively. Etter, with the consent of Santori, sells one-third of...
-
A company's operating income is $1,000,000 with a $300,000 net operating loss carry forward. How much income tax expense is recorded assuming a 40% tax rate?
-
If A(1,2) , B(4,3) and C(6,6) are the vertices of a parallelogram ABCD, find the coordinates of the fourth vertex D.
-
Using the forecast projections on Exhibit 10, calculate the Free Cash Flows in each year. Assume the following for simplicity: Technically the deal is supposed to close mid 2012. Assume that the deal...
-
Utilitarians would say that jeopardizing motorists does not by itself make Ford's action morally objectionable. The only morally relevant matter is whether Ford gave equal consideration to the...
-
Develop a solid waste recycling program for your company/ community. The recycling program should cover the location, size and estimated quantities. Evaluate source reduction and recycling programs...
-
The sum of eight consecutive odd numbers is 656. The average of four consecutive even numbers is 87. What is the sum of the smallest odd number and second largest even number?
-
2. Dorian the Dragonslayer is on the hunt for a ravenous dragon. He does not know exactly where the dragon's lair is, but based on recent sightings, Dorian has found that the likelihood of the lair...
-
r = 0.18 Find the coefficients of determination and non-determination and explain the meaning of each.
-
Joe Schmaltz has carried on a retail business for about 20 years. He intends to transfer the business assets and liabilities to a corporation, Schmaltz Enterprises Ltd. (SEL), in which he will own...
-
A senior tax partner in your office has requested that you meet with Mr. Jehangir Dauwalla, a new client, to assist in preparing his personal income tax return. During your initial client meeting,...
-
Mrs. Diet owns all 100 common shares of Low-Cal Caterers Inc. (Low-Cal), a Canadian-controlled private corporation with a December 31 year-end. Low-Cal was incorporated in 1983 when Mrs. Diet...
-
Example 11.3 introduces Klein's Model I. Use the data file klein to answer the following questions. a. Estimate the investment function in equation (11.18) by OLS. Comment on the signs and...
-
Mike's Veneer Shop owns a vacuum press that requires annual maintenance. Mike has a contract to cover the maintenance expenses for the next 5 years. The contract calls for an annual payment of \(\$...
-
True or False: The Consumer Price Index typically increases faster than the Higher Education Price Index.
Study smarter with the SolutionInn App