Reference no: EM133266554

Net rental income

• Income
  The total amount of rent received throughout the year is subtracted from any expenses that were made in relation to the property to arrive at the net rental income. In the fiscal year 2017-2018, Bonnie and Clyde's rental property brought in a total of $22,050 in revenue for them. This comprised rent received for the remainder of the year in addition to rent received in advance on the 15th of June (for July 2018). In addition to that, they were given a reimbursement of lease preparation fees (just a portion of the total), as well as an insurance recovery for damaged tiles caused by a hailstorm.
• Expenses
  The following expenses were incurred by Bonnie and Clyde in relation to their rental property during the 2017-2018 financial year: the construction of a car park and driveway, repairs for a damaged gate caused by the previous owner, loan establishment fees, council rates, building insurance premiums, loan repayments (including interest), real estate agent fees, and Archicentre Australia fees.
• Net Rental Income
  During the 2017-2018 fiscal year, Bonnie and Clyde had a negative net income from rental property of $32,845. This indicates that their yearly total expenditures were higher than their yearly total income for the year.

Can Bonnie and Clyde more effectively own the rental property so as to reduce tax overall, if you are now told that their respective taxable incomes, besides the rental property, are: 

Bonnie     $26,000 

Clyde      $116,000 

You are to give reasons whether Bonnie should own it, Clyde own it, or both own it jointly