1. List ALL the steps (including the formulas) about the calculation of net tax
payable for an individual taxpayer. (5 marks)
2. You have prepared the tax return for one of your clients Peter. He, single, is
an Australian resident for tax purposes. His taxable income is $92,000. There
are not any reportable fringe benefits, total net investment losses, reportable
super contributions and exempt foreign employment income applicable to
his case. You sent a copy of documentation to Peter for his approval, and in
turn, he sent you an email to ask why he would need to pay $920 as Medicare
levy surcharge apart from the Medicare levy of $1,840. In his email, he also
asked you to advise the options he can adopt to exempt from Medicare levy or
Medicare levy surcharge. What will you reply to Peter? (5 marks)
3. List 14 principles about Code of Professional Conduct that will apply to all
registered tax agents and BAS agents. (7 marks)
4. What are the major rules in relation to record keeping prescribed by ATO?
5. What are the features in taxation for the following types of entities?
a. Sole trader;
d. Company; and
e. Superannuation fund. (15 marks – 3 marks each)
6. How will you identify and collect client data relevant to tax documentation
requirements? Discuss how the Privacy laws may impact how you manage
documentation and record. (10 marks)
7. You are preparing the company tax return for one of your clients, ABC Pty
Ltd. This company is exporting the woods from Australia to overseas. Paul,
the director of the company provided you all the necessary documents
including the bank statements and tax invoices based on your checklist.
When you sort out the documents, you find Paul gave you an invoice showing
that the company spent $6,000 for a piano. You were told by Paul that this
piano is placed at his home and his daughter will play the piano when
he invites his customers and suppliers to his home for Party in order to
maintain the business relationship with them. Provide the advice to Paul if
the company can claim deduction for this piano purchase.
8. What are the differences between ordinary income, statutory income, exempt
income and non-assessable, non-exempt income? (5 marks)
9. Mary, one of your clients, is an Australian resident for tax purposes. She
comes to see you and ask you to prepare her 2015 tax return. In the firstmeeting, she told you that she sold 1,000 units of ABC shares at $2.00 during
the year. She purchased these shares at $0.50 on 3 August 2012. What is the
tax implication of this event? How much income in this case will be taxed?
10. You are the registered tax agent, and received an email from Daniel, one of
your clients. He is currently operating a small business of coffee shop with
his wife (50:50 ownership) in the form of partnership. He asked you in the
email that how much tax he will pay for the partnership if the business profit
is expected to be $90,000, and which tax documentation will be required to
prepare and submit to the ATO. How will you reply to his email?
Total Marks Part A: 65
Part B – Case Study
Tax Documentation Preparation Requirements
You are the registered tax agent. Gary is your new customer, and comes to see
you for his 2015 tax return preparation. In the first meeting, he provided you the
f He has a full time job as a customer service manager;
f His employer contributed the superannuation to his super fund with the rate
of 9.5% on his total salary;
f He has three personal bank accounts;
f He received a dividend from a listing company;
f He is required to use his own car to visit the customers from his workplace
to the customers’ premises;
f He purchased a new laptop;
f He needed to wash, dry and iron his uniform with company logo at home, but
he does not have any written evidence to support his claim;
f He attended a course Customer Service at APC;
f He sold several shares during the year;
f He is not married, and does not have a private health fund with hospital
f He has an investment property and rent it out for income-generating
He seeks your advice to the following issues:
1. He normally needs to drive his own car to the workplace, can he claim the
travel from his home to the workplace?
2. He needed to wash, dry and iron his uniform with company logo at home, but
he does not have any written evidence to support his claim, can he still claim
the laundry expenses in his tax return?
3. What kind of the expenses can be claimed for investment property if it is used
for income-generating purpose?
4. He asked you to send him a checklist that includes all the information and
documents he is needed to provide for his tax return preparation.
5. How long should he keep all the documents?
Required: Write an email to Gary to respond to his above queries.
Notes to students:
f You can use the following template to answer Part 4;
f Your answers have to be directly connected with the scenario;
f You are required to seek the information from ATO website www.ato.gov.
au for any areas you are not familiar with in order to provide the appropriate
advice to your client.