1. Business
  2. Other
  3. question 4 harold is sole trader operating out of south...

Question: question 4 harold is sole trader operating out of south...

Question details

Question 4

Harold is sole trader operating out of South Kensington. The following information is provided regarding his income earning activities. o In Year 1, Harold earned assessable income of $55,000 and incurred allowable deductions of $80,000. He also derived net exempt income of $5,000. o In Year 2, Harold earned assessable income of $101,650 and incurred allowable deductions of $95,000. He also derived net exempt income of $15,000 and received a dividend from an Australian listed company of $16,345 (100% franked).

Harold has no other income sources.

REQUIRED:

Advise Harold of the tax consequences from the above fact situation, by answering the following three questions:

1. Determine Harold's tax loss in Year 1 that will be carried forward. (3 Marks)

2. Calculate Harold's taxable income in Year 2. (5 Marks)

 3. Explain whether the dividend income will be included in the unincorporated small business entity tax offset calculation. (2 Marks)

Disregard the non-commercial loss rules and GST in your examination. You are not required to include legislative references in this question; however, you must show full workings.

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution