Class Test Marking System

 Class Test out Marking Scheme Essay

BUSL 320 – MID-SEMESTER CLASS CHECK

WEDNESDAY – 30 THE SPRING 2014

OBSERVING SCHEME

ISSUE 1:

(ALLOCATED MARKS WITH THIS QUESTION: 6)

This issue tests scholar's understanding of:

 How the tax formula can be applied;

 How net capital gains are contained in assessable salary: sec 102-5 ITAA97;

 The need to apply the CGT discount;

 How to determine the capital gain using the low cost method. Namely: o Take away the cost basic from the capital proceeds;

um Deduct any capital losses; and then

o Reduce the effect by the relevant discount percentage.

 The need to gross up foreign cash flow to include international tax paid;  The necessity to subtract foreign tax paid out as an offset against the gross taxes payable.

Three (3) markings should be allocated to students whose response shows clear comprehension of the above items, even if the last arithmetical solution is wrong.

SOLUTION:

Computation of Nona Putz's duty liability for the 2013/14 tax year: Assessable Income:

$

one particular, 605

40, 000

eighty-five, 090

5, 800

133, 495

Interest

Salary

Net Capital Gain

Rent

Major Assessable Profits

Less: Rebates:

Work Related Expenses

Local rental Expenses

TAXABLE INCOME

370

5, nine hundred

6, 270

127, 225

1

(Notes 1 and 2)

Taxes Payable about $127, 240

35, 020. 25

Add: Medicare Levy ($127, 225 x 1 . 5%)

1, 908. thirty seven

Less: Credit for PAYG withheld

NET TAX PAYABLE

14, 1000

22, 928. 62

COMPUTATION OF: Assessable Income – Taxable Salary - & Net Duty Payable: This is certainly worth 1 . 5 represents.

EXPLANATORY RECORDS:

Note you: Investment Property:

(This is worth zero. 5 marks).

$

256, 200

Capital Proceeds

Fewer: Cost Bottom

Purchase price

80, 000

Imprevisto Costs:

Legal Costs

800

Agent's Cssn.

11, 1000

Capital Gain

Capital Gain After Lower price

Note 2: Sale of Shares:

Capital Takings

Less: Cost Base

Purchase Price

+ Imprevisto Costs:

Broker (on purchase)

Brokerage (on sale)

Capital Gain

tips, 800

154, 400

77, 200

(This is worth 0. 5 marks).

18, 1000

9, seven-hundred

220

one hundred ninety

10, 128

7, 890**

** You cannot find any CGT discount in this case because the stocks and shares were held for less than 12 months before they were sold.

Be aware 3: Sale of Car:

(This is worth zero. 5 marks).

The proceeds from someone buy of a exclusive asset is definitely insufficiently connected to an income getting activity. Hence, it is not assessable as cash flow.

Automobiles are not CGT assets.

2

QUESTION a couple of

This issue was one of many Study Manual questions in the CGT PPT slides that student's had been expected to browse:

ALLOCATED MARKS: 4 represents. (See problem for the breakdown in the marks).

Because Maria features satisfied the conditions in ITAA97 Subdiv 152-A, her net capital gain is computed by applying things in s i9000 102-5(1): The first step : Maria must offset any kind of current year capital failures and any unapplied net capital failures against the capital gain this wounderful woman has made through the current yr. Step 2: Apply the CGT discount percentage.

Step 3: Apply the small business concessions beneath Div 152.

Applying actions, Maria's net capital gain for the 2012/13 taxes year is usually calculated as follows:

$

Capital Gain

150, 000

Fewer: prior year's losses

(30, 000)

a hundred and twenty, 000

Much less: 50% CGT discount

(60, 000)

CGT after discount

60, 1000 Yellow highlight: 2 represents.

Less: 50 percent small business donation

Assessable capital gain

(30, 000)

$30, 000 Blue highlight: a couple of marks.

several

QUESTION a few

This question was one of the Study Manual questions in their PPT photo slides that scholar's were supposed to read:

GIVEN MARKS IN THIS QUESTION: four. Please note that 1 draw should be given for addressing each item in the four bullet details below.

As an Australian homeowner, Ivana is usually assessable to tax on her worldwide cash flow;

She for that reason has to are the foreign profits in her assessable cash flow; To include the other income into her assessable income, this lady has to low up the foreign income received to include the other tax ($300) paid; The other tax paid will be said as a international tax credit rating...

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