Sam Ryan is a self-employed accountant and registered for GST His receipts and payments (not including GST) for the year ended 30 June 2017 are as follows:

Receipts

$ 200,000 Professional accounting fees 25,000 Sales of Do-It-Yourself Superannuation guides 8,000 Income from part-time military service (note 1) 7,000 Dividends received from an Australian resident company fully franked 24,000 Net salary received from part-time lecturing at the University ($6,000 in PAYG W) (note 2) 2,000 Refunds from Government Medicare System for medical expenses 5,000 Interest on Bank Deposits 10,000 Rental income from an investment property

2,000 Profit on sale of office equipment (note 3)

500,000 Gambling wins (note 4)

Payments

$ 14,000 Office rent 10,000 Cost of Do-It-Yourself Superannuation guides (note 5)

50,000 Salary paid to employee secretary 290 Purchase of new calculator

1,400 Cost of meals and entertainment for himself and clients 1,200 Train fares for travel to and from work (note 6) 2,200 Rates on family home (note 6) 900 Electricity for family home (note 6)

1,000 Tax agents fees for preparing tax returns for Sam 5,000 Gross medical expenses for Sam and his wife. 2,000 Rates paid on abovementioned investment property 15,000 Interest paid on loan to acquire the investment property 5,000 Cost of painting the investment property immediately after purchasing the

property 1,000 Cost of replacing roof tiles on the investment property after the roof was damaged in a severe storm in February 2017 15,000 Cost of extending the bathroom in the investment property

5,000 Maintaining Sams father Myron, who is a permanent resident of Australia and who earned $2,282 adjusted taxable income during the 2016-2017 income year.

Notes

(1) The part-time military income is exempt.

(2) Sam received the free use of a motor vehicle which had a FBT taxable value of $5,000 for the period ending 30 March 2017.

(3) Profit on sale of office equipment. The office equipment was purchased on 1 July 2014 for $10,000. Sam estimated its effective life for taxation purposes at the time of purchase at 10 years. He uses the prime cost method.

Sale proceeds sale date 30 June 2014 ---$5,000 Net book value based on accounting depreciation ---$3,000

Profit $2,000

(4) Sam laid 602 bets on horses during the 2013-2014 income year totaling $100,000. He financed much of his lifestyle from his gambling winnings. He did not maintain an office nor employ staff for his betting activities. His betting approach, which involved reading the racing section of the daily newspapers, yielded consistent profits. He kept records of every bet and results of successful wagers. He attended one racecourse per week and placed not more than one bet on each race. On other days he placed his bets at his local betting office.

(5) The Opening stock value for tax purposes was $19,000. The FIFO Method however produces the following results for the Do-It-Yourself Superannuation guides at the end of the year:

Cost Price 12,000

Replacement Price 9,000

Market Selling Value 14,000

(6) Sam has a carry forward past year tax loss of $12,000.

(7) Sam is married. His wife, Le Chien, works full-time and earns assessable income of $82,282 per year. Neither Sam nor Le Chien are eligible for a Family Tax Benefit Part B.

(8) Neither Sam nor Le Chien have private hospital insurance.

****REQUIRED****

Sam would like to minimise his tax liability for the year. Calculate Sams tax liability for the year ended 30 June 2017.