Prepare a Letter of Advice to Jacob that outlines/discusses/explains the following 1. The tax implications of the sale of his first house and purchase of new house, including any exemptions available and noting any additional information you may require from Jacob. Calculate the assessable gain, if any

Letter of Advice to Jacob that outlines/discusses/explains the The tax

your customer In December 2016, Jacob requested that you prepare his income tax return for the year that ended on June 30, 2016. Additionally, he is asking for your tax guidance in regard to other matters. He offers the following details:
Jacob wants to buy a new house to reside in after selling his existing one. On October 31, 1987, he paid $190,000 for the residence. In addition to the purchase price, he paid $4,850 in stamp duty and $1,900 in legal fees. With the exception of the time from December 31, 2006, to December 31, 2014, Jacob has resided in the home as his primary residence ever since. At the end of 2006, the house had a $290,000 market value.
Jacob has to do the following repairs in order to sell this house:
whole-house painting $6,200
To improve the appearance of the house’s front, build a fence. $3,600
$2,400 for fixing the front porch, which is starting to collapse.
He has located the ideal home to purchase, so he could have to do so before selling his first home, which would mean that there might be a time when he owns two homes. For $480,000, he could sell his first home.
Jacob protected a little boy from a shark attack throughout the year while serving as a volunteer lifeguard on his neighborhood beach. Jacob received a $650 Apple watch from the boy’s parents. In addition, he received a bravery award for rescuing the youngster.
For the fiscal year that concluded on June 30, 2016, in addition to the aforementioned transactions, Jacob had the following earnings and costs:
Income salary (teacher) in dollars: $72,000
Dividends from Telstra shares that are franked 2,850 were the reward Holiday earned from his bank for starting a new savings account. His 10-year-old son receives a $3,200 family tax benefit; Jacob is the only father.
1,300
Expenditure
Buying shoes and apparel for the workplace
use of a personal vehicle for educational purposes. Additional details are provided below.
the price of pursuing a master’s degree in teaching in order to advance
This sum consists of $1,850 for a laptop bought on January 25, 2016. 3,650
Contributions to his superannuation for himself: $3,000
Tax agent fees of 750 PAYG are deducted from his pay. 15,900
Jacob used his CX-9, which he paid $42,000 for in June 2013, for school-related tasks. He traveled 25,000 kilometers in a year, 5,600 of which were for academic purposes. Running costs comprise:
Insurance and registration: $1,700
Fuel $2,080
$450 fine for speeding
Services and repairs: $750
REQUIRED:
Write a letter of advice to Jacob that covers the following topics:
1. The tax repercussions of selling his previous home and buying a new one, taking into account any exemptions that may be available and noting any extra information you may need from Jacob. Determine the gain that is taxable, if any. (10 marks)
2. The financial effects of his home purchase on his taxes (5 markings)
3. The tax ramifications of obtaining the courage award and an Apple Watch (4 markings)
4. How all other items stated in the report should be assessed and deducted for determining Jacob’s taxable income for the year that ended on June 30, 2016. (10 marks)
5. Jacob’s tax obligations (refundable), including any additional levies and tax offsets, for the fiscal year that concluded on June 30, 2016. (7 markings)
Important Information: Jacob is a wise taxpayer who carefully considers any tax advice given to him. You will need to give adequate (but succinct) explanations about the income tax treatment of all the aforementioned goods in order to guarantee Jacob is satisfied with your recommendations.
As a result, all of your discussion and interpretation must be supported by citations to relevant laws, court decisions, or other legal documents. It will not be appropriate to refer to the Master Tax Guide, as it is not the authoritative source but rather aids in your comprehension of the laws, decisions, and judgments. Jacob wants your advice to be given in a style that he can understand, so duplicating entire parts of laws, decisions, or cases will not be suitable.
You could have to make a choice that goes in a certain direction if you have to make assumptions about the lack of precise knowledge that Jacob will later supply; nonetheless, you should give a brief justification if another course of action is more appropriate.
Your recommendations should be made properly in a business letter addressed to Jacob (not in an essay about him), addressing each concern as required. Be succinct in your response because, as you know, quantity is not usually a good indicator of quality.
Make sure you gain these marks as well, because a total of 4 marks (or 10% of the total marks for the assignment) will be given for reference, formatting, and presentation.

 

 

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