Question

Australian Taxation Capital Gains Tax Q1: On 1 January 1991, Russell Shrewd purchased 200 shares in...

Australian Taxation

Capital Gains Tax Q1:

On 1 January 1991, Russell Shrewd purchased 200 shares in ABC Ltd for $1,400 and 300 shares in XYZ Ltd for $2,600, intending to hold them as an investment. On 15 August 2015, he sold the shares in ABC Ltd for $700. As at 30 June 2017, the shares in XYZ Ltd had risen in value to $3,000. Russell’s only other income in the year ended 30 June 2017 was a salary of $22,000. On 20 December 2017, Russell sold shares in XYZ Ltd for $3,600. His only other income in the year ended 30 June 2018 was a salary of $23,000.

What is Russell’s taxable income for each of the years ended 30 June 2017 and 30 June 2018? (Note there was no change in marginal tax rates from 2017 to 2018).

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Russell's taxable income year ended 30 June 2017 is 21,300

Russell's taxable income year ended 30 June 2018 is 24,000

Explanation:

On 1 January 1991, Russell purchased 200 shares of ABC ltd

ABC shares valued at $1,400

15 August 2016, shares in ABC Ltd sold for $700

capital loss=1400-700

=$700

Russel also purchased 300 shares in XYZ Ltd

XYZ ltd shares valued at $2,600

30 June 2016, XYZ shares value rose to $3,000

Since shares are not sold, there is no capital gain if share value increase.

Other income in 2017 salary of $22,000

Taxable Income for year ended 30 June 2017=salary adjusted for capital loss

=22,000-700

=$21,300

On 20 December 2017,XYZ share are sold for $3,600

salary at end of 2017 $23,000

capital gain=3600-2600

=$1,000

Taxable Income for year ended 30 June 2018=salary+capital gain

=23,000+1,000

=$24,000

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Australian Taxation Question. Companies Q1: Antipodes Pty Ltd earns Australian sourced non-dividend income of $300,000 and...
Australian Taxation Question. Companies Q1: Antipodes Pty Ltd earns Australian sourced non-dividend income of $300,000 and American sourced nondividend income of AUD$400,000 for the current income year. During the current year, Antipodes has paid a PAYG income tax instalment of $40,000 relating to the previous year and PAYG income tax instalments of $115,000 in respect of the current year. Antipodes wants to distribute the maximum possible dividend to its shareholders before making the next PAYG tax instalment. It has 600,000...
Australian Taxtaion Jason, an Australian resident for tax purposes, has carried forward ordinary capital losses from...
Australian Taxtaion Jason, an Australian resident for tax purposes, has carried forward ordinary capital losses from the year ended 30 June 2017 of $8,000 and carried forward collectable losses of $4,000 from the year ended 30 June 2016. On 22 October 2019 he sold land for $76,000 that he purchased on 7 March 2014 for $44,000. He also sold an antique on 12 February 2020 for $3,000 that he purchased for $800 on 8 December 2008. What is his net...
Jason, an Australian resident for tax purposes, has carried forward ordinary capital losses from the year...
Jason, an Australian resident for tax purposes, has carried forward ordinary capital losses from the year ended 30 June 2017 of $8,000 and carried forward collectable losses of $4,000 from the year ended 30 June 2016. On 22 October 2019 he sold land for $76,000 that he purchased on 7 March 2014 for $44,000. He also sold an antique on 12 February 2020 for $3,000 that he purchased for $800 on 8 December 2008. What is his net capital gain...
Q1 (Disposal of two assets) On 10 April 1988, Penny Pleb, an Australian resident, purchased a...
Q1 (Disposal of two assets) On 10 April 1988, Penny Pleb, an Australian resident, purchased a block of land for $74,000 as an investment. On 19 February 2018, she sold the land for $125,000. Penny also sold shares in Prosperous Ltd for $32,000 on 1 August 2017. The shares had cost Penny $8,000 on 17 July 2009. Penny did not dispose of any other assets during the year, nor did she have any capital losses from previous years. Required: Calculate...
Bala, an Australian resident for tax purposes, disposed of the following assets: a) Sold his car...
Bala, an Australian resident for tax purposes, disposed of the following assets: a) Sold his car (acquired 8 April 2015 for $24,000) on 21 May 2020 for $12,000. b) Sold an Ann Fung acrylic painting (acquired 8 April 2016 for $10,000) on 10 April 2020 for $5,000. c) Sold his home (acquired 31 December 1984 for $30,000) on 6 June 2020 for $350,000. d) Sold 2,000 XYZ Bank shares on 1 June 2020 for $100,000. The brokerage fee for the...
The question is related to the Australian tax 2018. Matt, Amber and Georgie start a business...
The question is related to the Australian tax 2018. Matt, Amber and Georgie start a business advisory practice using a partnership structure and Matt and Amber invest $150,000 each. The partnership agreement provides: • Both Matt and Amber are to receive interest at the rate of 6% pa on their capital contribution of $150,000. • Georgie will receive a salary of $70,000 for the management of the practice, as well as superannuation contributions of 14,000. • A car will be...
Anushka (an Australian Tax resident) works as an employee for a child care centre, Brilliant Kids...
Anushka (an Australian Tax resident) works as an employee for a child care centre, Brilliant Kids Pty Ltd, on a permanent part-time basis while she runs her business as a day carer for her own customers. Meanwhile, she invested some of her extra cash in some shares on the ASX and in an Australian private company. Listed below is the summary of her earnings for the year ended 30 June 2020. Particulars $ Net Salary Received from Brilliant Kids for...
Tutorial: Capital Gains Tax 1.         Kai, a long-term Australian resident, decided to move overseas permanently, leaving...
Tutorial: Capital Gains Tax 1.         Kai, a long-term Australian resident, decided to move overseas permanently, leaving during June 2016. Accordingly he entered into the following transactions: a, He sold his Mitsubishi station wagon (acquired 30 November 2005 for $20,000) on 31 March 2016 for $2,000. b, He sold his home at Mission Beach (acquired 31 December 1984 for $50,000) on 30 April 2016 for $200,000. His home had included a separate and designated home office occupying 10% of the floor...
The accounting profit before tax of Jameson Ltd for the year ended 30 June 2018 was...
The accounting profit before tax of Jameson Ltd for the year ended 30 June 2018 was $320,000. It included the following revenue and expense items: Amortisation of development costs $30,000 Employee benefits expense 54,000 Carrying amount of plant sold 36,667 Depreciation expense - plant (15%) 40,000 Doubtful debts expense 12,000 Entertainment expense 14,220 Fines and penalties 7,200 Goodwill impairment 1,000 Insurance expense 24,000 Legal fees 4,200 Proceeds on sale of plant 30,000 Rent revenue 25,000 Royalty revenue (non-assessable) 3,500 Restructuring...
Selene Ltd is a major Australian manufacturer of women’s clothing. Selene Ltd acquired on 1 July...
Selene Ltd is a major Australian manufacturer of women’s clothing. Selene Ltd acquired on 1 July 2016 all the issued shares (cum-div.) of Marcus Ltd, a competitor, for $330 000. At this date, the equity of Marcus Ltd was as follows: SHARE CAPITAL $200,000 RETAINED EARNINGS $50,000 GENERAL RESERVE $20,000 All the identifiable assets and liabilities of Marcus Ltd were recorded at amounts equal to their fair values except for the following: Carrying Amount Fair Value Plant (cost $220,000) $180,000...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT