Luke Martin is a single, 41-year-old, resident taxpayer who is employed as a charted accountant. During the 2020-21 tax year he earned a salary of $140,000 from which his employer withheld PAYG of $42,000. Luke also derived rent of $10,000 from his residential investment property and made a net capital gain during the year of $30,000. 

Luke is a shareholder in CBT Pty Ltd and received a $7,000 dividend from the company which also had $1,000 of franking credits allocated to it. Luke is also a beneficiary of a family trust and was presently entitled to $10,000 of the income of the trust estate. Luke incurred the following tax-deductible expenditure during the year;$800 for attending a professional development seminar;$700 for the decline in value of a computer used at home for work related purposes; $6,000 for repairs to the fence of his investment property;$500 in tax agent fees to prepare last year’s tax return. Luke had private health insurance throughout the 2020-21 tax year and does not have any outstanding HELP debt. 

Required:

Calculate Luke’s taxable income and tax liability for the year ended 30 June 2021 supporting your answer with reference to appropriate sections of the Income Tax Assessment Act.

Answer rating: 100% (QA)

Calculation of taxable income of Mr Luke Martin as on 3062021 Particulars Amount Amou... View the full answer