Reference no: EM132359956
Question - Assessable income
Frankie is a resident individual and he received the following amounts in the 2017/18 year.
Gross wages $150 000
Lottery win $1 200 000
Prize from amateur baseball team $500
Army Reserve payments $10 000
Personal Loan from bank $15 000
Business loan
75% Franked dividends from shares held. The dividends were reinvested in the paying company under a dividend reinvestment plan $10 000
Capital gain from shares held more than 12 months $10 000
Frankie also runs a business as a sole trader.
Gross receipts $277 500
Prepaid amounts $20 000
Frankie has a strict policy of returning all prepaid amounts if clients ask for their money back prior to services being provided.
Frankie also has investments overseas.
Gross amount of interest paid on money saved in India in an Indian bank. A$ 5 000
Required
With reference to relevant legislation and case law determine which of the receipts listed are classified as ordinary income or statutory income and if necessary calculate the amount to be included in Frankie's assessable income.