Christopher is a new client who comes to you to prepare his 2017 tax return. He works as a mechanical engineer.
He provides you with the following information:
Gross Salary from Fluor Australia Pty Ltd $95,141
PAYGW deducted by employer $22,750
Net cash salary received $73,391
Bank interest received from ING Bank $4,581
Cash Dividends received from NAB and Telstra $3,782
(These dividends are 72% franked)
Bank interest from BNZ a New Zealand bank $469
(NZ withholding tax of $46 was deducted from the New Zealand Interest)
Property located at 8/7 James Street Ringwood - Available for rental for financial year
Rent received $18,250
Refund of medical expenses from Medicare $2,000
Interest on money borrowed to purchase the income producing property $18,000
Rental property repairs $3,000
Medical expenses for Christopher and his wife Helen $7,500
Replace tin iron roof on rental property with tiled roof on 3 March 2017 $11,000
Donation to Salvation Army $100
Purchase of sun hat from the Anti-Cancer Council as he works outdoors $45
Purchase of hand held calculator for work purposes $285
Purchase of I Pad for work purposes (80% of the time) $925
The estimated life of I Pad is 3 years. It was bought on 14 April 2017
Home office expenses (power and gas bills) $1,468
Christopher used 1 room out of 5 as his home office as it was more convenient to work at home in the evenings.
Disposal of 1000 BHP shares - purchased 1 Dec 2001 for $23.40 and sold on 31 Oct 2016 for 23.07.
Sold antique diamond ring purchased at local fete on 30 Sept 2016 for $5 on 30 June 2017 for $20000.
Sold motorcycle purchased 18 May 2005 for $10000 for $3000 on 18 Sept 2016.
Has a Capital Loss carried forward from 2014 - $9000 (non-collectable)
Calculate Christopher's taxable income and tax payable for the year ended 30 June 2017. He and his wife have private health cover. He wishes to minimize his tax liability to the extent legally possible.
Fully explain the treatment of each item and refer to relevant legislation or case law to support your treatment.
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