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Thomas is in the business of selling computers and related software from a building he owns in Haymarket, Sydney Most customers pay at the time

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Thomas is in the business of selling computers and related software from a building he owns in Haymarket, Sydney Most customers pay at the time of delivery. However, Thomas provides credit to his largest customers. During the year ended 30 June 2019 Thomas received $2,800,000 in cash for sales of computers and related software. Sales which had been made during the year ended 30 June 2018, but which were paid for in the year ended 30 June 2019 were $260,000 and are included in the $2,800,000 above. At 30 June 2019 sales of computers and related software not yet paid for amounted to $430,000. Thomas purchased the building in Haymarket in 1986. On 1 April 2019 Thomas leased part of the building to a third party for $650 per month During the year ended 30 June 2019 purchases of computers and related software were $1,800,000 and at the end of 30 June 2019 stock on hand was $150,000 (valued at cost) or $285,000 (valued at market). Thomas's closing stock for the year ended 30 June 2018 was $630,000. During the year ended 30 June 2019 Thomas took 2 computers from his stock for private use in his home. The computers cost him $1,240 each and had a market value of $1,630 each. Thomas also gave away another 4 similar computers to his friends during the year. Thomas had an overall loss for the year ended 30 June 2018 from all his activities of $180,000 (there were no capital losses). Included in this loss of $180,000 was a donation to a charity of $25,000. During the year ended 30 June 2018 Thomas earned exempt income of $11,000 During the year ended 30 June 2019 Thomas received an inheritance of $80,000 (lump sum) and real estate of $1,630,000 from a distant relative who died on 14 August 2017. Expenses that related to the business during the year ended 30 June 2019 were as follows: Motor vehicle expenses Accounting fees Telephone expenses Wages - this included $150,000 paid to his spouse who worked for 3 days a week in the business. Another employee who also did the same job for 3 days a week was paid $120,000 $14,000 $4,000 $23.500 $380,000 On 1 July 2018 Thomas also bought a rental property for $820,000. He borrowed $530,000 on the same day from the bank to buy the property. The term of the loan was 4 years. The property was leased on 1 July 2018. He received rent in cash from his tenants during the year ended 30 June 2019 in the amount of $85,000. Included in this amount was a payment of $11,000 on 28 June 2019 as rent for the month of July 2019. Thomas also incurred the following expenses during the year ended 30 June 2019 in relation to the property Repairs to the front fence damaged by his tenant $1,750 Council Rates $1,550 Insurance $1,450 Land Tax $2,650 Agent's Commission for collecting rent $3,780 Loan Repayments ($6,250 principal and $40,250 interest) $46,500 Loan application fee (paid on 1 July 2018) $1,200 Stamp duty on the mortgage for the loan (paid on 1 July 2018) $1,800 Stamp duty on the purchase of the property (paid on 1 July 2018) $33,000 Building a garage at the side of the property on 1 January 2019 $103,500 New microwave $1,650 Repairs on 2 July 2018 to the Stove damaged in June 2018 $470 Thomas wants to minimise his taxable income for this year. Assume all depreciating assets, if any, have an effective life of 5 years and were purchased on 1 July 2018 unless otherwise stated. He does not wish to use the SBE election Required: Calculate Thomas's taxable income or loss for the year ended 30 June 2019. You must give reasons for your answer. Your discussion must include an analysis of the pertinent sections of the relevant legislation, rulings and the relevant case law. If relevant, you must show your culation. You must apply the law to the facts in the quiz paper and provide YOUR O l ysis of the isso write a comprehensive answer to the quiz question Thomas is in the business of selling computers and related software from a building he owns in Haymarket, Sydney Most customers pay at the time of delivery. However, Thomas provides credit to his largest customers. During the year ended 30 June 2019 Thomas received $2,800,000 in cash for sales of computers and related software. Sales which had been made during the year ended 30 June 2018, but which were paid for in the year ended 30 June 2019 were $260,000 and are included in the $2,800,000 above. At 30 June 2019 sales of computers and related software not yet paid for amounted to $430,000. Thomas purchased the building in Haymarket in 1986. On 1 April 2019 Thomas leased part of the building to a third party for $650 per month During the year ended 30 June 2019 purchases of computers and related software were $1,800,000 and at the end of 30 June 2019 stock on hand was $150,000 (valued at cost) or $285,000 (valued at market). Thomas's closing stock for the year ended 30 June 2018 was $630,000. During the year ended 30 June 2019 Thomas took 2 computers from his stock for private use in his home. The computers cost him $1,240 each and had a market value of $1,630 each. Thomas also gave away another 4 similar computers to his friends during the year. Thomas had an overall loss for the year ended 30 June 2018 from all his activities of $180,000 (there were no capital losses). Included in this loss of $180,000 was a donation to a charity of $25,000. During the year ended 30 June 2018 Thomas earned exempt income of $11,000 During the year ended 30 June 2019 Thomas received an inheritance of $80,000 (lump sum) and real estate of $1,630,000 from a distant relative who died on 14 August 2017. Expenses that related to the business during the year ended 30 June 2019 were as follows: Motor vehicle expenses Accounting fees Telephone expenses Wages - this included $150,000 paid to his spouse who worked for 3 days a week in the business. Another employee who also did the same job for 3 days a week was paid $120,000 $14,000 $4,000 $23.500 $380,000 On 1 July 2018 Thomas also bought a rental property for $820,000. He borrowed $530,000 on the same day from the bank to buy the property. The term of the loan was 4 years. The property was leased on 1 July 2018. He received rent in cash from his tenants during the year ended 30 June 2019 in the amount of $85,000. Included in this amount was a payment of $11,000 on 28 June 2019 as rent for the month of July 2019. Thomas also incurred the following expenses during the year ended 30 June 2019 in relation to the property Repairs to the front fence damaged by his tenant $1,750 Council Rates $1,550 Insurance $1,450 Land Tax $2,650 Agent's Commission for collecting rent $3,780 Loan Repayments ($6,250 principal and $40,250 interest) $46,500 Loan application fee (paid on 1 July 2018) $1,200 Stamp duty on the mortgage for the loan (paid on 1 July 2018) $1,800 Stamp duty on the purchase of the property (paid on 1 July 2018) $33,000 Building a garage at the side of the property on 1 January 2019 $103,500 New microwave $1,650 Repairs on 2 July 2018 to the Stove damaged in June 2018 $470 Thomas wants to minimise his taxable income for this year. Assume all depreciating assets, if any, have an effective life of 5 years and were purchased on 1 July 2018 unless otherwise stated. He does not wish to use the SBE election Required: Calculate Thomas's taxable income or loss for the year ended 30 June 2019. You must give reasons for your answer. Your discussion must include an analysis of the pertinent sections of the relevant legislation, rulings and the relevant case law. If relevant, you must show your culation. You must apply the law to the facts in the quiz paper and provide YOUR O l ysis of the isso write a comprehensive answer to the quiz

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