Maddox Smith Staff asked 5 years ago

Tax

Q

Jim Cox, a software designer, and resident of Australia earned the following income for the year ended               30 June 2014: a) $55000 from sources in Australia b) The   equivalent of Aus$30,000  as salary while  working                overseas for  three months (foreign                income tax amounting to Aus $5000 had been deducted from his income) c) Fully franked dividend of $10000, and d) Dividend income of $850 from WYS Ltd, a London based company (15% withholding tax has been paid). Required: 1) Analyze Jim’s                situation with relevant Tax Law and calculate the assessable income for                the year ended 30 June 2014. Show proper reasoning to support your decision.       2) Assuming Jim does not have any deductions, what is the tax  payable on the income? Show the           Calculations in detail.      Jane and Sally are employed school teachers      who       have      a              very       wide      general knowledge.        Both                decide  to            enter     a              television            quiz        program               called    “Lease  of            the         Decade”.             Under   the                rules,     contestants        receive $100       for          each      appearance,       but         if             questions            are         answered            correctly,             they      receive                substantial          cash       prizes    and        other     prizes,   such as household items and holiday packages.  The        holiday packages  cannot  be transferred or redeemed, but the organizers of the program allow them to be converted into alternative venues     and     accommodation.Jane and Sally go on the show but Jane  is eliminated in  the first  contest and receives her $100. Sally,however, makes   10           appearances.     She wins  cash prizes of            $50,000,               household                appliances           worth    $20,000   and        a              trip         to            Europe with       her         family    valued  at            $30,000.               Analyze                the                scenario               given above for                Jane       and sally by identifying and applying the relevant law. Discuss and recommend on the assessability of these prizes. Present a conclusion.        Scenario 3: Fringe Benefit Tax