QUESTION 13.3  (Rental property, capital allowances)

Alf Ericsson, a resident Australian taxpayer, owns a house in Sydney from which he derives rental income. During the tax year, Alf had the following transactions in relation to the property:

 

RECEIPTS
Rent Received (net of $940 agent's commission)	$24,660
Water RatesRecovered	515
LeasePreparation Fee Recovered	15
PAYMENTS Agents' Commission	940
Letting Fee	300
Lease Preparation Fee	30
BankCharges	83
Mortgage Repayments	12,800
Council Rates	1,220
PAYG tax instalments paid	4,200
Insurance	410
LandTax	1,93O

 

Replacement of broken window (1 May 2022, effective life 5 years)

Air Conditioning (28 February 2022, effective life 10

years)

New Light Fitting (30 April 2022, effective life 5 years) Water Rates

OTHER INFORMA TION

• Mortgage Repayments were made in respect of:

Principal             $ 3,200

Interest                 9,600

 

205

2,700

 

250

920

 

• On 3O April 2017, borrowing costs of $950 were incurred on the mortgage, which has a term of 20 years.
• Alf wishes to use the Commissioner's estimates of effective life.

In   addition,    Alf   had   maintained    a   schedule   from    previous   years of depreciable assets that he has acquired for the property:

Asset           Cost        Written        Effective                    Depreciation

(8)      Down Va/ue                Life              Method at 3O/6/2I        (years)

 

 

Hot Water Service        1,800              1,500

Carpets                    3,800           2,9OO

Blinds                        1,3O0           1,O5O

 

12          Prime Cost

10           Diminishing Value

10          Diminishing Value

Calculate Alf's net rental income from the property     that he would include as part of his taxable income for the 2021/22 tax year.