Bryan is an Australian resident who had the following income and expenses for the year ended 30th June 2022: Income: Non Assessable Non Exempt income (fringe benefits) under ITAA36 s23L $20,000 Salary from Big Bank Ltd (an Australian resident bank) $80,000 Interest from Big Bank Ltd $ 5,000 Rent from investment property at Manly NSW $15,000 Unfranked dividend from shares in CorpCo Ltd $70,000 Deductions: Interest on loan used to acquire Manly property $10,000 Assuming that the interest on the loan used to acquire the Manly property is a valid deduction for Australian income tax purposes Bryan’s taxable income for the year ended 30th June 2022 will be: Group of answer choices $170,000 (being the sum of all his income items other than the non-assessable non-exempt income under s23L) less $10,000 (being his interest deductions) = $160,000. $170,000 (being the sum of all his income items other than the non-assessable non-exempt income under s23AG). $190,000 (being the sum of all his income items) less $10,000 (being his interest deductions) = $180,000 $170,000 (being the sum of all his income items other than the non-assessable non-exempt income exempt under s23L) less $10,000 (being his interest deductions) less his tax offset of
In order to calculate Bryan’s taxable income for the year ending on June 30, 2022, we need to consider his various sources of income and allowable deductions. Bryan, an Australian resident, had the following income and expenses:
Non-Assessable Non-Exempt Income (Fringe Benefits) under ITAA36 s23L: $20,000
Salary from Big Bank Ltd (an Australian resident bank): $80,000
Interest from Big Bank Ltd: $5,000
Rent from investment property at Manly, NSW: $15,000
Unfranked dividend from shares in CorpCo Ltd: $70,000
Deductions
Interest on loan used to acquire Manly property: $10,000
Let’s break down the calculation step by step:
Step 1: Calculate the total income. This includes all of Bryan’s income sources except for the non-assessable non-exempt income under ITAA36 s23L:
Salary + Interest + Rent + Unfranked Dividend = $80,000 + $5,000 + $15,000 + $70,000 = $170,000
So, Bryan’s total income from assessable sources other than the non-assessable non-exempt income is $170,000.
Step 2: Deduct allowable expenses. In this case, Bryan has one deduction, which is the interest on the loan used to acquire the Manly property:
Total Income – Deductions = $170,000 – $10,000 = $160,000
Therefore, Bryan’s taxable income for the year ending on June 30, 2022, is $160,000.
It’s important to note that the non-assessable non-exempt income under ITAA36 s23L is not included in the taxable income calculation, as it is specifically exempt from income tax.
As for tax offsets, the question does not provide information about any tax offsets Bryan might be eligible for. Tax offsets are applied to reduce the amount of tax payable and would depend on various factors, including Bryan’s personal circumstances, such as whether he is eligible for any tax credits or rebates. Without more information, we cannot determine the exact amount of any tax offset.
In conclusion, Bryan’s taxable income for the year ending on June 30, 2022, is $160,000, based on the information provided and assuming the interest on the loan used to acquire the Manly property is a valid deduction for Australian income tax purposes. Any tax offsets would need to be calculated separately based on Bryan’s individual circumstances.
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