Your client, Tom Lee runs small clothes shop in the suburb of Kingston, Hobart. He operates as a sole trader. The business is known as ‘Tom’s fashions’ and Tom Lee has an ABN and is also registered for GST. The following figures are exclusive of GST.

Receipts

298,000 Sales of clothes

17,000 Rental income from an income producing investment apartment

1,000 Interest on Bank deposits.

8,000 Fully franked dividend from a large Australian public company

2,000 Exempt income from part-time military service

2,000 Private Health fund refunds

6,000 Fifty-percent franked dividend received from a large Australian public company

Payments

15,000 Body Corporate fees on income producing property

25,000 Part-time employee salary

2,000 Superannuation contribution for employee

5,000 Interest on money borrowed to purchase the income producing investment apartment

3,000 Insurance and land tax for the investment property

1,100 Fees paid to a registered Tax Agent

30,000 New item of plant with an estimated life of 10 years

1,000 Travel to and from work

2,000 Rates on his principal residence

5,000 Doctors fees for Tom Lee

3,000 Doctors fees for Tom’s wife, Mary

6,000 Superannuation contribution for Tom Lee

(a) Tom Lee is using the Small Business Entity (SBE) concessions

(b) Stock at beginning of the year was valued at $35,000

Stock at end was: Cost $16,000

Market selling value $19,000

Replacement $18,000

(c) On 1 July 2018 the opening depreciation pool balance for the SBE pool was $40,000. During the year Tom Lee purchased 1 new depreciating assets used 100% for business purposes. This is recorded in the payment’s information listed above. The investment apartment was purchased new on 1 July 2018 and is part of a hotel complex. The real estate agent advised Bill Jones that the construction cost of the apartment was $287,000 and this was confirmed by the builder.

(d) Tom Lee has a carry forward tax loss from an earlier income year of $10,000.

(e) Tom Lee and his family are members of a private health fund and do have private hospital insurance.

REQUIRED

Calculate Tom Lee’s personal tax liability for the year ended 30 June 2019. You should explain your treatment of each item in this question. Figures can be rounded to the nearest dollar.