James Is An Australian Resident And Earned All His Income From Australian Source

James is an Australian resident and earned all his income from Australian sources during the 2016/2017 financial year. His gross salary is $92,000. His interest income from bank savings is $3,000. During the income year, he sold an investment property which had been held for less than 12 months. The proceeds is $699,000 and the cost base is $424,000. Prior to disposal, he derived rental income from the property, and incurred interest on borrowings to acquire the property. The rental income is $17,000 and the interest costs is $20,000. He spent $3359 on special protective uniform which was required for his job and $908 on fishing gears as fishing is his hobby.

During the same financial year, James also received dividends of $3,000  from his investments in an Australian company. The dividends are 60% franked. The Australian company’s tax rate is 30%. Assume James’ marginal tax rate for the financial year is 20%.



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