Question 2

Rocco has received the following receipts for the year ended 30/6/19

Gross wages $80,000 $21.500 tax withheld from wages

Lottery win $120,000

Prize from amateur baseball team $500

Maintenance payments from ex-spouse $10,000

Loan from bank $15,000

75% Franked dividends $10,000

Capital gain from shares held more than 12 months $10 000

Rocco has a rental property The receipts and expenses associated with his property

for the year ended 30/6/17 were as follows:

Gross rent $27,500

Expenses

Interest on loan used 80% for rental property $22,500

Council rates rental property $1,200

Fine from council for barking dog $800

Repairs to rental property following storm damage $3,500

Other information

Rocco has the following depreciating assets for the rental property held for the whole year

Hot water service acquired on 1/7/2017

Diminishing value method Opening

value = $6,000

Effective life 10 years

Carpets acquired on 1/7/2016

Prime cost method

Opening value = $4,000

Effective life = 8 years

Rocco has a carry forward capital loss from shares of $2,000. He also has a carry forward

capital loss from a collectible of $10,000. The tenant owes rent of $3,500 as at 30/6/15

Required

1) Classify all amounts which are included in assessable income

2) Classify and calculate any amounts which are deductible

3) Calculate Roccos taxable income

4) Calculate the balance of Roccos assessment

5) What are the differences between a tax deduction, a non-refundable tax offset and

a refundable tax offset?

Supply all applicable calculations and legislative references