Steve and Carol Lee are your clients and they have come to you to prepare their...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Steve and Carol Lee are your clients and they have come to you to prepare their tax returns. During the 2022-23 financial year, Steve and Carol disposed of the following assets that they owned jointly due to a relationship breakdown: (a) An investment apartment in Brisbane owned as joint tenants. The apartment was purchased on 1 October 2018 for $550,000 and sold for $950,000. The contract of sale was entered into on 8 June 2023 and settlement is to take place on 15 September 2023. The stamp duty and legal fees at the time of acquisition were $25,000. The advertising and estate agent's fees at the time of disposal were $6,000. Steve and Carol rented the apartment for the total time that they owned it and always claimed the expenses as a deduction. During this period, they derived rent of $150,000. During that period that they owned the apartment they paid a total of $175,000 in interest, local council rates and insurance. When the settlement finally takes place, they will need to repay their mortgage of $450,000. This amount is still owed at the date of the contract. (b) Vacant Land. Steve and Carol sold vacant residential land originally purchased on 16 July 1984 for $100,000. They owned this land as joint tenants. They initially intended to build a house on the land but lacked the finance to do so. The land was sold for $650,000 on 20 June 2023. (c) A Ferrari motor car that is 66 years old. The motorcar was purchased by Steve and Carol for $180,000 on 1 July 2016. They own this motor car as joint owners. It was a special and rare motorcar with only 4 made in 1956. It was sold for $420,000 on 12 December 2022. (d) A painting. The painting was purchased by Steve and Carol for $120,000 on 1 May 2009 and sold for $300,000 on 30 April 2023. The painting was by Arthur Streeton. (e) A motor yacht. Steve and Carol used the boat for recreational purposes. They bought the boat on 1 May 2020 for $160,000. They were both joint owners of the boat. They sold the boat for $186,000 on 26 March 2023. On 1 July 2012, Steve and Carol purchased a house for $380,000, which they used as their main place of residence. They owned this property as joint tenants. On 1 July 2018 they both left Australia to take up jobs in Oman. During their stay in Oman, they did not buy a house, but instead lived in rented accommodation. They returned to Australia and began living in the house again on 30 June 2021. During their absence from Australia, a friend lived in the house and paid Steve and Carol rent of $12,000 per year. Their friend also paid all the outgoings on the house such as the rates, insurance, and electricity. The house was sold for $960,000 on 26 May 2023. Shares in BHP. Steve and Carol bought BHP shares on 2 June 2022 for $45,000. The shares were bought in their joint names. They sold those shares on 2 May 2023 for $90,000. Steve and Carol have capital losses from previous years of $32,000 from the sale of shares and $13,000 capital loss from the sale of a painting by Roberts. They each have an entitlement to 50% of the losses. During the financial year, Carol received a salary of $154,746 from her position as the manager of a small engineering consulting practice. She received a travel allowance of $1,400 for the year and claimed a total of $2,365 as the actual expenses. She has no other deductions. Her employer withheld $29,000 as PAYG W. Steve received a salary of $138,430 from his employment as a consultant engineer and has deductions of $2,549 as work-related expenses. His employer has withheld $28,500 as PAYG W. REQUIRED: Calculate Steve and Carol's tax payable for the year ending 30 June 2023. You will need to prepare separate calculations for both Steve and Carol. They owned all of the assets jointly. Resident tax rates 2022-23 Taxable income 0-$18,200 $18,201 - $45,000 $45,001 - $120,000 Tax on this income $180,001 and over Nil 19 cents for each $1 over $18,200 $5,092 plus 32.5 cents for each $1 over $45,000 $120,001 - $180,000 $29,467 plus 37 cents for each $1 over $120,000 $51,667 plus 45 cents for each $1 over $180,000 The above rates do not include the Medicare levy of 2%. Steve and Carol Lee are your clients and they have come to you to prepare their tax returns. During the 2022-23 financial year, Steve and Carol disposed of the following assets that they owned jointly due to a relationship breakdown: (a) An investment apartment in Brisbane owned as joint tenants. The apartment was purchased on 1 October 2018 for $550,000 and sold for $950,000. The contract of sale was entered into on 8 June 2023 and settlement is to take place on 15 September 2023. The stamp duty and legal fees at the time of acquisition were $25,000. The advertising and estate agent's fees at the time of disposal were $6,000. Steve and Carol rented the apartment for the total time that they owned it and always claimed the expenses as a deduction. During this period, they derived rent of $150,000. During that period that they owned the apartment they paid a total of $175,000 in interest, local council rates and insurance. When the settlement finally takes place, they will need to repay their mortgage of $450,000. This amount is still owed at the date of the contract. (b) Vacant Land. Steve and Carol sold vacant residential land originally purchased on 16 July 1984 for $100,000. They owned this land as joint tenants. They initially intended to build a house on the land but lacked the finance to do so. The land was sold for $650,000 on 20 June 2023. (c) A Ferrari motor car that is 66 years old. The motorcar was purchased by Steve and Carol for $180,000 on 1 July 2016. They own this motor car as joint owners. It was a special and rare motorcar with only 4 made in 1956. It was sold for $420,000 on 12 December 2022. (d) A painting. The painting was purchased by Steve and Carol for $120,000 on 1 May 2009 and sold for $300,000 on 30 April 2023. The painting was by Arthur Streeton. (e) A motor yacht. Steve and Carol used the boat for recreational purposes. They bought the boat on 1 May 2020 for $160,000. They were both joint owners of the boat. They sold the boat for $186,000 on 26 March 2023. On 1 July 2012, Steve and Carol purchased a house for $380,000, which they used as their main place of residence. They owned this property as joint tenants. On 1 July 2018 they both left Australia to take up jobs in Oman. During their stay in Oman, they did not buy a house, but instead lived in rented accommodation. They returned to Australia and began living in the house again on 30 June 2021. During their absence from Australia, a friend lived in the house and paid Steve and Carol rent of $12,000 per year. Their friend also paid all the outgoings on the house such as the rates, insurance, and electricity. The house was sold for $960,000 on 26 May 2023. Shares in BHP. Steve and Carol bought BHP shares on 2 June 2022 for $45,000. The shares were bought in their joint names. They sold those shares on 2 May 2023 for $90,000. Steve and Carol have capital losses from previous years of $32,000 from the sale of shares and $13,000 capital loss from the sale of a painting by Roberts. They each have an entitlement to 50% of the losses. During the financial year, Carol received a salary of $154,746 from her position as the manager of a small engineering consulting practice. She received a travel allowance of $1,400 for the year and claimed a total of $2,365 as the actual expenses. She has no other deductions. Her employer withheld $29,000 as PAYG W. Steve received a salary of $138,430 from his employment as a consultant engineer and has deductions of $2,549 as work-related expenses. His employer has withheld $28,500 as PAYG W. REQUIRED: Calculate Steve and Carol's tax payable for the year ending 30 June 2023. You will need to prepare separate calculations for both Steve and Carol. They owned all of the assets jointly. Resident tax rates 2022-23 Taxable income 0-$18,200 $18,201 - $45,000 $45,001 - $120,000 Tax on this income $180,001 and over Nil 19 cents for each $1 over $18,200 $5,092 plus 32.5 cents for each $1 over $45,000 $120,001 - $180,000 $29,467 plus 37 cents for each $1 over $120,000 $51,667 plus 45 cents for each $1 over $180,000 The above rates do not include the Medicare levy of 2%.
Expert Answer:
Answer rating: 100% (QA)
Lets start with Steve Steves Total Income Salary 138430 Workrelated expenses 2549 Net capital gain f... View the full answer
Related Book For
South Western Federal Taxation 2015
ISBN: 9781305310810
38th Edition
Authors: William H. Hoffman, William A. Raabe, David M. Maloney, James C. Young
Posted Date:
Students also viewed these law questions
-
As an employee, how can you see your employer's annual summary of workplace injury or illness?
-
Carol is your accounting client and has come to you to prepare her tax return. During the 2021-22 financial year , Carol disposed of the following assets: (a) A holiday house. The house was purchased...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
A company has the following results for the three accounting periods to 31 March 2021: Assuming that all possible claims are made to relieve the trading loss against total profits, calculate the...
-
Consider an ordinary binary min-heap data structure with n elements that supports the instructions INSERT and EXTRACT-MIN in O (lg n) worst-case time. Give a potential function such that the...
-
This project requires the student to summarize Sections 3522 Tax Transactions; 3523 Tax Services for Persons in Financial Reporting Oversight Roles; and 3524 Audit Committee Pre-Approval of Certain...
-
Consider the simple linear regression model fit to the ozone data in Problem 2.13. Problem 2.13 Davidson ("Update on Ozone Trends in California's South Coast Air Basin," Air and Waste, 43, 226, 1993)...
-
1. East Coast Yachts uses a small percentage of preferred stock as a source of financing. In calculating the ratios for the company, should preferred stock be included as part of the companys total...
-
Discuss the following forms of share buy-backs permitted in Australia. Include a short description of the characteristics of each form and any legal conditions that are imposed: Equal access...
-
Which series has the highest beta. BraveNewCoin Liquid Index for Bitcoin 1D BNC Trading Brave Ne Yellow Green Blue Orange
-
2. If f EY, the graph of f is the set of points (x, f(x)) = ExY, for x = E. Suppose E is compact. Prove that f is continuous on E if and only if its graph is compact. (You may take the distance...
-
Mane Street normally sells 3000 economy-size bottles of shampoo for \(\$ 10\) per bottle. The cost to manufacture the shampoo is \(\$ 5.00\) per bottle. Further variable processing costs of \(\$...
-
The local council has been approached to set up a new industrial precinct of the edge of a suburb. A number of proposals have been put forward for the use of the land and the community has been...
-
A manufacturing business that makes photocopiers has annual net sales of \(\$ 30\) million from selling 60000 photocopiers per year. As a part of its manufacturing process, it consumes 150000...
-
The Possum Transport Company produces bikes, skates and mopeds. Mopeds are not as popular as they used to be, and the company is considering dropping this product. Possum currently sells 10000 mopeds...
-
An electronics manufacturing business is designing a new range of digital radios. The business is environmentally aware and has found a way to recycle old analogue radios as well as their new digital...
-
Question 15 A system in dynamic balance implies that: A. There will absolutely no wear of bearings The system is critically damped B. There is no critical speed in the system The system is also...
-
The Place-Plus real estate development firm in Problem 24 is dissatisfied with the economists estimate of the probabilities of future interest rate movement, so it is considering having a financial...
-
Susan traveled to rural Tennessee during the year to do volunteer work for one week for Habitat for Humanity. She normally receives $2,000 salary per week at her job and is planning to deduct the...
-
Explain the meaning of the terms active income, portfolio income, and passive income.
-
Identify two provisions designed to limit the tax benefits a taxpayer may obtain from a tax shelter investment. Describe how these rules reduce or defer the recognition of tax losses.
-
True or False: Engineers seldom have an opportunity to influence the recovery period for expenditures.
-
True or False: Straight-line depreciation is the most popular depreciation method used in financial reporting.
-
A lumber company purchases and installs a wood chipper for \(\$ 200,000\). The chipper is classified as MACRS 7-year property. Its useful life is 10 years. The estimated salvage value at the end of...
Study smarter with the SolutionInn App