Reference no: EM133187079
Question - 1) Taxpayer is self-employed and has derived $106,000 in assessable income but incurred allowable deductions of $150,000 in earning that income in the 2021 income year.
Included in the allowable deductions is a donation of $2,000 to the Royal Melbourne Hospital and superannuation contributions of $5,000 to Australian Super.
He also derived net exempt income of $17,000.
What is the tax loss for the 2021 income year in accordance with Div 36:
a. 8,000
b. $15,000
c. $25,000
d. $20,000
2) Which of the following is not a legal tax minimisation technique?
a. Understating the closing stock value
b. Salary packaging
c. Minimising taxable income by making a gift to an eligible gift recipient
d. Claiming large deductions for capital works by purchasing an income producing property
e. Income splitting via an assignment
3) Which section of the Act is not usually relied upon by auditors of the ATO in order to carry out their audit duties
a. s 166 ITAA36
b. s 353-10, Schedule 1, TAA 53
c. s 353-15, Schedule 1 TAA 53
d. s 1-7
e. Div 284, Schedule 1 TAA 53
4) Which of the following statements is most correct?
a. Tax evasion occurs where a taxpayer negatively gears a rental property and reduces their taxable income by large interest payments
b. Tax evasion occurs where a taxpayer deliberately does not report all of their assessable income, overstates their deductions and tax offsets
c. Tax evasion occurs when a taxpayer claims a tax deduction for an expense they have incurred.
d. Tax evasion always occurs when a taxpayer runs their business through a company.