Peter Foster is a tax agent with his own tax practice in the form of sole proprietor. His receipts and payments (excluding GST) for the year ended 30 June 2021 are as follows: Receipts Professional fees: $220,000 Income from part-time teaching at a university: $22,000 Interest on bank deposits: $5,500 Rental income from an investment property: $30,000 Page 2 of 2 Fully franked dividends received from an Australian resident company: $7,000 Payments Office rent: $30,000 Salary paid to a secretary: $55,000 Electricity: $3,300 Office sundry expenses: $11,000 Train fares for travel to and from work: $500 Entertainment: $9,000 Interest paid on loan to acquire the investment property: $28,000 Council rate and water for the investment property: $2,200 Cost of repairing roof tiles of the investment property: $3,300 Cost of extending a bathroom in the investment property: $17,000 John Jones has a carry forward past year tax loss of $10,000. He is single and does not have any private hospital insurance.

REQUIRED

For each part provide at least 500words describtion

Part A: Assuming Peter Foster is a resident of Australia for tax purposes, calculate his assessable income, allowable deductions, taxable income and tax liability for the year ended 30 June 2021.

Part B: With reference to case law and statutory law, explain whether the aforesaid receipts are assessable income and payments are allowable deductions under the Australian tax law in the Part B calculations.