TAXATION LAW

In relation to his 2021 income tax return, Ronald is unsure of the income tax implication for a number of receipts and payments throughout the year and is seeking your professional advice.

Ronald Knight is an Australian resident taxpayer, is single and aged 34 years old. Ronald is employed full-time as a high school History teacher with the NSW Department of Education and has also recently purchased a rental property that he intends to rent to tenants in the near future. In relation to his 2021 income tax return, Ronald is unsure of the income tax implication for a number of receipts and payments throughout the year and is seeking your professional advice.

In the form of a letter of advice (directed to Ronald as your client) advise him of the income tax implications for the following receipts and payments relating to the year ended 30 June 2021. Calculation of taxable income is NOT required.

Rental Property expenses.

On 1 May 2021 Ronald purchased a residential property that he intends to rent to tenants in August 2021. In June 2021 he incurred $7,000 replacing the propertys rusting roof with a new roof of identical material. Up until 30 June 2021 he also incurred $1550 in interest relating to the bank loan he took out to purchase the property.