Please help me do the individual income tax return for the attached questions

7106AFE Income Tax Law Semester 1, 2016 7106AFE Income Tax Law Tax Return Assignment DUE DATE: By 11pm on Monday 23 May, 2016 WEIGHTING: 30% of final grade SUBMIT: Online via the Assignment submission point provided on the course Learning@Griffith website. INSTRUCTIONS: In groups of three or four students you are required to use the following client information to complete the provided Answer Template (available to download from Learning@Griffith), which uses the same item layout as the actual Income Tax Return for Individuals. You must also include an estimate of your client's tax payable/refundable. Each group's submitted assignment will be graded on the group's ability to correctly apply the law to the various issues, whilst citing the relevant law and showing their calculations where relevant. Please note that the issues are not weighted equally. Some issues will be minor and others major. The marks will be distributed across the various issues accordingly. Please note that to ensure that all group members make a significant contribution to their group's assignment, students will be responsible for allocating their group's assignment mark to their fellow group members via SPARKplus (Self & Peer Assessment Resource Kit). Note that due to the use of the SPARKplus tool, individual group members may be credited with an assignment mark lower than the actual mark gained by their group. *** You should not discuss your assignment with anyone other than the Lecturer *** Page 1 of 8 7106AFE Income Tax Law Semester 1, 2016 CLIENT INFORMATION: General Facts: Brian Roberts is 37 years old and is an Australian resident for tax purposes. Brian is an employee teacher working for Brisbane Secondary College. Brian has been working as an English teacher since he completed his Diploma of Education degree fifteen years ago. He lives in a house in St Lucia, is single, and has no dependants. Brian is completing a Master of Education at Griffith part time. He attended classes two nights a week during each Semester. Brian has supplied you with the information below relating to his personal income tax affairs for the year ended 30 June 2016. However, he is not certain whether everything he has provided you with is assessable or deductible. Because of his uncertainty, he has asked you to carefully consider each item and determine whether it is assessable or deductible. Brian wishes to minimise his 2015/16 taxable income wherever legally possible and he will be lodging income tax returns in further years. Assume that the amounts detailed below are all of Brian's receipts and expenditure for the 2015/16 income year, and that all of his expenses are correctly substantiated (unless stated otherwise). 1. Personal information Full Name: Brian Roberts Date of Birth: 30 May 1978 Occupation: Teacher Tax File Number: 111 222 333 Telephone Number: (07) 5522 8877 Home Address: 11 New St St Lucia 4076 Postal Address: 11 New St St Lucia 4076 Page 2 of 8 7106AFE Income Tax Law Semester 1, 2016 2. 2014/15 income tax return Brian used the services of his uncle (who is not a registered tax agent) to help him complete his 2014/15 tax return. His uncle sent him an invoice of $330 for the tax return preparation. Brian paid it on 25 July 2015. Brian paid his 2014/15 income tax liability three months late, so the Australian Taxation Office (ATO) imposed $146 in general interest charges (GIC), which he paid on 2 February 2016. 3. Salary and Wages During the 2015/16 income year, Brian worked as a teacher for Brisbane Secondary College. Brian was provided with a PAYG Payment Summary from his employer for the period from 1 July 2015 to 30 June 2016, which included the following information: Name of Payer: Brisbane Secondary College ABN of Withholder: 00 111 222 789 Gross payments: $87,590* Car Allowance: $184 PAYG tax withheld: $21,948 *Note that the gross payments of $87,590 include an amount of $1,020 for annual leave that was paid to Brian on 1 July 2015, although he took the leave in June 2015. 4. Inherited Australian Shares Brian's grandfather Greg bequeathed him a share portfolio, which Brian inherited on 22 September 1999 (the date of Greg's death). The details of Greg's share portfolio as at 22 September 1999 are as follows: Number of shares Date of purchase Total purchase price Market value at 1/9/96 BHP 300 31/7/84 $1,694 $7,146 CBA 200 31/7/92 $1,440 $2,180 Company Name On 1 July 2015, Brian decided to sell all his shares in BHP and CBA, to help with the purchase of a rental property. His capital proceeds were: $16,200 from the sale of the CBA shares and $10,146 from the sale of the BHP shares. Page 3 of 8 7106AFE Income Tax Law Semester 1, 2016 5. Unexpected receipts 6. Brian received $200 cash from his sister as a birthday present. He also received a Christmas present (a $50 Myer gift card) from the School Principal. The principal gives a similar type of Christmas gift to all staff every year. Expenses During the 2015/16 income year, Brian incurred a number of expenses that he believes are related to his employment as a teacher. Brian informs you that he has receipts for all the following expenses. Expenses Amount Australian Education Union membership For the year 2015/16 $1,320 Annual membership of the English Teachers Association of Queensland $420 Annual subscription to the Weekend Australian which Brian uses as a teaching resource $156 Home office expenses Brian often prepares for his teaching and marks his student's work at home (an average of five hours a week for 40 weeks of the year). He set up a 'home office' in a separate area of his house; this takes up 15% of the entire floor space of his house. A colleague at his school told him that he can claim deductions for a proportion of the following expenses: Interest on mortgage loan $3,000 Council rates $1,500 Water rates $800 Home insurance Electricity (15 cents per unit and there are an average of 3 units per hour used) Books and DVDS $700 $1,400 $330 In 2015/16, Brian purchased several books and DVDs that he used exclusively for his teaching at a total cost of $330. Page 4 of 8 7106AFE Income Tax Law Semester 1, 2016 Expenses Amount Vehicle Information Brian uses his own car when he has to travel between the Brisbane and Teneriffe campus for a weekly staff meeting. The vehicle is a 2.0 litre Toyota Corolla (with an ordinary engine) which Brian purchased outright on 1 July 2015 for $26,000 (including GST). Brian has kept a logbook for the vehicle and according to his logbook, over a twelve-week period the car travelled 1,212 kilometres. This total was made up of: Travel from home to usual workplace and back home 552 km Travel from usual workplace to Teneriffe campus 89km Travel from Teneriffe campus to home 95km Travel to visit friends and family 454 km Travel from work to uni 10km Travel from uni to home 12km The expenses that Brian incurred over the whole income year in relation to the vehicle were as follows: Registration Insurance RACQ membership Fuel Maintenance Car washes $ 720 $ 840 $ 149 $3,160 $1,380 $ 240 Brian receives a car allowance from the school for travel between campuses and travel from Teneriffe to home. Ties Brian's employer requires all male teachers to wear a tie to work. In order to comply with the school's dress policy, Brian purchased three ties during the year for a total cost of $150. Brian has never worn the ties outside of work and he does not intend to do so. Stationery items $150 $55 Brian purchased stationery items on 6 occasions during 2015/16, in each case he spent less than $10. He has misplaced all the receipts for these purchases. Page 5 of 8 7106AFE Income Tax Law Semester 1, 2016 Expenses Amount Attendance at Teaching Conference Brian attended an annual two-day education conference for secondary teachers held in Adelaide in April 2016. The school did not require any of its teachers to attend the conference. Brian attended with two of his colleagues who usually go to the conference every year as they see it as useful and informative. Brian paid for the following expenses: $750 Conference registration fee Airline tickets Accommodation for one night Taxi travel to and from the airport in Adelaide and Brisbane $590 $175 $244 Lunch was provided at the conference, Brian paid for his other meals on each of the two days: Breakfast ($22 and $29) $51 Dinner ($38 and $45) $83 Note: The school reimbursed Brian for the cost of the taxi travel ($244) 7. Gifts and Donations During the 2015/16 income year, Brian made the following payments: Payment Amount Fred Hollows Foundation (cash donation) $300 50 tickets in a raffle organised by the Australian Heart Institute; first prize is a new car $500 In addition to the above, Brian spends 2 hours every weekend working as a volunteer for the Salvation Army. He estimates the value of his work to be $50 per hour, which he believes is deductible. Page 6 of 8 7106AFE Income Tax Law Semester 1, 2016 8. Books When Brian's grandfather died, he also left him a rare first edition book - The Two Towers by J.R.R Tolkien (Volume 2 of The Lord of the Rings) that he had acquired in 1970 for $20. This volume was published in Boston in 1965; its market value at the time of Greg's death was estimated at $120. After his grandfather's death, Brian found the other two volumes from the same edition at a local bookshop and purchased them for $260 and $320 respectively on 22 January 2016. Brian then sold the set of three volumes for $1,400 on 29 May 2016. 9. Boat Brian sold his boat for $11,000 on 14 June 2016 to a private buyer. Brian did not use the boat for income producing purposes. He had bought the boat second-hand for $10,500 on 7 May 2011. Brian had some repairs done to the boat in May 2013, at a cost of $1,100. Other costs of ownership include a total of $250 for the annual insurance premiums that Brian has paid since he acquired the boat. 10. Rental Property - House at 1001 View St, Deception Bay Brian borrowed $300,000 from the Commonwealth Bank (CBA) on 1 July 2015, all of which he used to finance the rental property purchase. He incurred a $1,200 loan establishment fee. The term of the loan is 25 years. On 7 July 2015, Brian purchased a three-bedroom house (constructed in 1965) located at 1001 View St, Deception Bay for $578,000. In acquiring the property, he incurred legal fees of $900 and transfer duty of $15,860. The house was listed with QLD Realty as 'available for rent' as of 11 July 2015. On 29 July 2015, the real estate agent advised Brian that there had been no applications from tenants, even though many people had viewed the house. Brian was convinced that the previous owner's decision to paint the walls of the house bright orange (two weeks before selling it to Brian) was the main reason there were no applications from prospective tenants. On 30 July 2015, Brian paid a total of $10,000 for the walls to be repainted white. On 18 August 2015, tenants signed a one-year lease and moved in. In the 2015/16 income year, Brian derived gross rental income of $18,700. Brian rents out the house partly furnished. On 28 July 2015, he purchased the following items for the house: Air conditioner (room unit) Washing machine Microwave oven $1,280 $ 950 $ 250 Page 7 of 8 7106AFE Income Tax Law Semester 1, 2016 Expenses relating to the rental property for the 2015/16 income year are as follows: 11. Council rates Cleaning Insurance Interest on CBA loan (paid in 2015/16) Pest control Pre-purchase building inspection Property management fees $ 1,680 $ 370 $ 1,420 $10,000 $ 600 $ 350 $ 4,460 Additional information (for 2015/16) Brian wants to use the diminishing value method to calculate any decline in value deduction claims and he does not wish to pool any low value assets Brian does not have any health insurance. Brian expects to lodge Australian income tax returns in future years. Brian does not want to use electronic funds transfer (EFT) if he is entitled to a refund. Brian does not have a HECS/HELP debt, nor does he have a financial supplement debt or any post-graduate FEE-HELP debt. Brian did not receive any trust distributions. END OF ASSIGNMENT Page 8 of 8 Assignment Handling Services Division of Information Services Nathan Campus GRIFFITH UNIVERSITY QLD 4111 GROUP ASSIGNMENT COVER SHEET DATE RECEIVED: Please complete all sections below Course Code: 7106AFE Course Name: Income Tax Law Due Date: 23/05/2016 Course Convenor: Assessment Item #: 2 John Minas Group Assignment Participants: Student Number: Student Name: Student Number: Student Name: Student Number: Student Name: Student Number: Student Name: ACADEMIC INTEGRITY DECLARATION Breaches of academic integrity (cheating, plagiarism, falsification of data, collusion) seriously compromise student learning, as well as the University's assessment of the effectiveness of that learning and the academic quality of the University's awards. All breaches of academic integrity are taken seriously and could result in penalties including failure in the course and exclusion from the University. 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Acknowledged by: Date: (insert name here) Where the item is submitted electronically Clicking \"I Agree\" constitutes an electronic signature for the purpose of assignment declaration compliance. Extension Requests: Assessment Item Number: Extension Granted: YES Due Date: NO Amended Due Date: Extension Approval Number: Extension Approved by: Examiner's Use Only: Approval Date: Tick Where Appropriate: Name: Submitted late without extension - returned to student to seek extension /special assessment. Mark Given: Suspected plagiarism: referred to the Course Convenor. Second Examiner: (if required) Returned to student to be resubmitted by: (date) for the following reasons: Mark Given: Examiner's Comments: Item 1 - Salary and Wages Salary Assessabl e or not? Amount assessabl e Brisbane Secondary College $87,590 Annual Leave $1,020 PAYG tax withheld - Brisbane Secondary College $21,948 Total assessable income $x Reasons and evidence Item 2 - Allowances, earnings, tips, director's fees etc. Allowances, earnings, etc. Assessabl e or not? Amount Reasons and evidence assessable Car allowance $184 Cash present from sister $200 Myer gift card $50 Total assessable income $x Item 18 - Capital Gains Potential CG - CGT event Steps Sold books Step 1 Calculation/ Reasoning/ Application of law Step 2 Step 3 Step 4 Step 5 Indexation Criteria Discount method Criteria Potential CG - CGT event Steps Sold inherited shares Step 1 Calculation/ Reasoning/ Application of law Step 2 Step 3 Step 4 Step 5 Indexation Criteria Discount method Criteria Net capital gain $x Potential CG - CGT event Steps Sold boat Step 1 Step 2 Calculation/ Reasoning/ Application of law Step 3 Step 4 Step 5 Indexation Criteria Discount method Criteria Net capital gain $x Item 21 - Rent Rent income / expenses House cost $578,000 Legal fees $900 Transfer duty $15,860 Rental income $18,700 Building inspection $350 Cleaning $370 Council rates $1,680 Insurance $1,340 Property manager fees $4,460 Repayments $10,000 (interest only) Pest control $600 Loan establishment fee $1,200 Assessable / (deductible) or not? Label Amount assessable / (deductible) Reasons and evidence Rent income / expenses Assessable / (deductible) or not? Label Amount Reasons and evidence assessable / (deductible) Repainting costs $10,000 Air conditioner $1,280 Washing machine $950 Microwave oven $250 Label P (Gross rent) $x Label Q (Interest deductions) $x Label F (Capital works deductions) $x Label U (Other rental deductions) $x Net rental property profit / (loss) $x Item D1 - Work-related Car Expenses Travel Distance Deductible Business Reasons and evidence kms Home to workplace to home Workplace to Teneriffe campus and to home Non work-related travel (Logbook) TOTAL BUSINESS KMS Note: in the table below, consider all methods (including eligibility) and choose the one that gives the best result Item Work related travel / car Deductibl e or not? Amount deductibl e Reasons and evidence expenses Work-related car expenses deductible $x Claim type: Item D2 - Work-related Travel Expenses Expenses Deductible or not? Amount deductible Reasons and evidence Flights to Adelaide for conference $590 Accommodation at hotel $175 Meals and sustenance $134 Taxi travel to and from the airports $244 Work-related travel expenses deductible $x Item D3 - Work-related uniform, occupation specific or protective clothing, laundry and dry cleaning expenses Expenses Deductible or not? Amount deductible Reasons and evidence $x Claim type: Ties $150 Work-related uniform etc expenses deductible Item D5 - Other Work-related Expenses Expenses Deductible or not? Amount deductible Reasons and evidence Union fees $1,320 Teachers Association membership $420 Annual subscription to Weekend Australian $156 Home office expense Books and DVDs $330 Conference fee $750 Stationery $60 Total deduction $x Item D9 - Gifts or Donations Gifts or donations Deductible or not? Amount deductibl e Reasons and evidence Fred Hollows Foundation $300 Australian Heart Institute $500 Volunteer Work for Salvation Army Total deduction $x Item D10 - Cost of Managing Tax Affairs Managing tax affairs Deductible or not? Amount deductible Reasons and evidence Invoice for cost of preparing 2014/15 tax return $330 General Interest Charge $146 Total deduction $x Item M1 - Medicare Levy Reduction or Exemption Reasons and evidence Item M2 - Medicare Levy Surcharge (MLS) Reasons and evidence Calculation of tax payable for 2015/16 Assessable income Allowable deductions Taxable income Basic Income Tax Lialbilty (etc)