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Advanced Diploma of Financial Services
(Financial Planning) Taxation Planning (AD1TAX)
Assessment Booklet
Students if possible should complete and submit all responses to the assessments digitally on
the electronic Advanced Diploma of Financial Services Taxation Planning Assessment
Booklet (‘soft copy’) provided. Students can copy this Microsoft Word file from the
AD1TAXCD-ROM and:
1.
Save a copy of the Taxation Planning Assessment Booklet to your computer.
2.
Change the file name to your Student Number provided by Investment Banking
Institute, for example, ‘AD1TAXSMITH001DEC2009 Version1”.
3.
Deliver any re-submissions (if required) with changes with different file name and
version number, for example the second submission should be
‘AD1TAXSMITH001DEC2009Version2’.
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Instructions
Students should work through the Course materials and the corresponding Assessment
Material carefully and at a comfortable pace.
Once you have completed all the responses (ie. Short Answer and Case Study) to the
Assessment Activities for Advanced Diploma of Financial Services Taxation Planning, please
submit your completed Assessment Booklet by:
Investment Banking Institute
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Email: training@ibi.edu.au
“I affirm that all work submitted within the Assessment Booklet is my true and original work
unless otherwise credited”
“I also declare that by inserting my name and date at the top of each page of the
Assessment Booklet Students that all assessment submissions to the Investment Banking
Institute are a result of their own work”.
Student Signature
(if submitting electronically, please print name)
Date:
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Advanced Diploma of Financial Services
(Financial Planning) Taxation Planning (AD1TAX)
Assessment Booklet
Investment Banking Institute
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Student
Location
Date
Assessor
Module 1
Activity 1 - What is a tax?
What do you think tax is?
Activity 2 - What are the primary areas of Australian government
spending?
a)
For what purpose does a country raise taxes?
b)
What are 4 other forms of funding are available to Government?
1
2
3
4
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Activity 3 - Estimated Australian Government revenue?
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What was estimated Australian government revenue in the last fiscal year? How much of this
revenue was raised from taxes?
Activity 4 - What alternative sources of financing are available for the
government?
How heavily does the Australian government rely on these alternative sources? Provide recent
examples?
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Activity 5 - Tax Mix – Types of Taxes
a.
What taxes are included in Australia’s tax mix at the federal level?
b.
What taxes are included in Australia’s tax mix at the State level?
c.
What wealth taxes still remain in Australia?
d.
What are the main consumption taxes in Australia?
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Investment Banking Institute
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Activity 6 - Constitutional Power and Tax Reform
a.
What is the role of the Treasury; Board of Taxation, Parliament and ATO in tax reform in
Australia?
b.
What are the key sections of the Commonwealth Constitution empower the federal
Government to impose tax in Australia?
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Activity 7 - Retrospective Tax Reform
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Is retrospective tax legislation appropriate? Why/Why not?
Activity 8 - Tax Rulings
Tax rulings are not law, but are binding in some circumstances.
How does this rulings system work?
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Activity 9 - Tax Rulings
Peter’s friend, Jamie received a favourable private binding ruling from the Commissioner
allowing her to deduct her education expenses. Peter’s personal situation is exactly the same as
Jamie’s.
Can Peter rely on the private binding ruling Jamie received?
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You are a financial advisor please explain Peter in simple terms?
Activity 10 - Taxation Law Improvement Project
Please explain when and why the Taxation Law Improvement Project was commenced?
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Activity 11 - Is a flat tax like GST equitable?
The introduction of the Goods and Services Tax (GST) on 1 July 2000 had a dramticv impact
on the tax mix of Australian Commonwealth.
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Does the GST on all food items, including essentials, might be efficient and simple to impose
but is it fair and equitable? Yes/No Why?
Activity 12 - Equity may be horizontal or vertical?
What is the difference between horizontal equity and vertical equity?
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Activity 13 - Personal Tax Calculation
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Jamie has received payments of salary of $76,000 in the financial year to 30 June. She has
spent $5,000 on travel associated with her job. She has also received rent of $5,000 from an
investment property, which has associated expenses of $6,000 (including interest on the loan
she took out to acquire the property).
a.
What is Jamie’s taxable income?
b.
What tax is payable by Jamie?
c.
What is the before tax return of the investment property?
d.
What is the after tax return of the investment property?
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Activity 14 - Progressive Tax
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What is a progressive tax? Is an income tax with a flat rate of 30% and a tax-free threshold of
$6,000 a progressive tax?
Activity 15 - Personal Tax
What is “bracket creep?
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Activity 16 - Tax Offsets
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What is a tax offset?
Activity 17 - Tax Offsets
What are 4 examples of tax offsets available in Australia?
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Module 2
Activity 1 - Taxable Income
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How do you calculate taxable income? Please create formula
Activity 2 - Assessable Income
2a
What types of income are included in ordinary income? How do you calculate ordinary
income?
2b)
How do you calculate assessable income? Are net capital gains added to assessable
income? Y/N
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Activity 3 - Assessable Income
3(a) How do you calculate Net Capital Gains?
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3(b) What types of income are included in Assessable income?
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Activity 4 - Case Study
Mark, a former bankrupt, enters into an agreement to work as a waiter in a restaurant after
losing his business in a major court case.
Mark agrees to work for $20 per day (below the minimum wage) because he believes he can
generate $250 a day in tips from customers.
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Are the tips received by Mark from customers working in the restaurant assessable income?
Yes / No and Why?
Activity 5 - Receipts in the ordinary course of a business
Would the following receipts be treated as income of a business? Yes/No and Why?
a.) The Premier’s Prize for Technology Innovation for $20,000 in cash, awarded to the
business by the Innovation Council of Victoria?
b.) A payment from the government to a farmer to buy back water rights?
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Activity 6 - Receipts in the ordinary course of a business
Kevin Murphy prepared all the hair and makeup for a celebrity wedding, for which he charged
and was paid $5,000. The bride, a TV star, is an old friend of Kevin. The wedding is a huge
success and her photograph was on the cover of Vogue magazine. She sends Kevin a cheque
for an extra $2,000 to say thanks for his great hairdressing for the wedding.
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Is Kevin assessable on the $2,000 cheque?
Activity 7 - Receipts outside the ordinary course of the taxpayer’s business
Why was the taxpayer taxed in Myer Emporium case but not in the Westfield case?
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Activity 8 - Carrying on a Business
Please read Tax Ruling (TR 97/11)
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In Tax Ruling (TR 97/11) what criteria need to exist as to whether someone in primary
production is carrying on a business versus a mere hobby? What are the criteria?
Activity 9 - Carrying on a Business
Please read TR 2005/1
In ATO Tax Ruling, TR 2005/1, discusses whether a professional artist is carrying on a
business? What are the criteria?
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Activity 10 - Types of Business Assets
What are the 4 types of business asset for tax purposes that have been identified by the
legislation and the courts?
1
2
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3
4
Activity 11 - What are depreciating assets
What is the definition of a depreciating asset
What are the 4 examples of depreciating assets?
1
2
3
4
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Activity 12 - What are examples of not depreciating assets
What are the 4 types of business asset for tax purposes that have been identified by the
legislation and the courts? What distinguish each type of asset from each other?
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1
2
3
4
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Activity 13 - Net Capital Gains – Assessable Income
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How much is the total net capital gain derived and added to assessable income in each of
these financial years? Please show your workings
Year
Asset
Cost Base
Capital Proceeds
1
A
$120,000
$100,000
B
$150,000
$200,000
2
C
$120,000
$100,000
3
D
$120,000
$100,000
E
$150,000
$180,000
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Activity 14 - Calculate tax Payable
Please complete the table below.
Please complete the table below by calculating the Tax Payable to the ATO by Kevin Smith as
an employee.
Kevin had gross total annual salary income for financial year ending 30 June 2009 of $165,000,
includes $20,000 in allowable Deductions.
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Key Steps to Calculating Tax Payable
Step
1
2
Function
CALCULATE Assessable Income
LESS Allowable Deductions
3
EQUALS Taxable Income
4
APPLY Tax Rate (2009/10)
5
6
EQUALS Tax Due (on Taxable
Income)
LESS Tax Offsets
7
ADD Medicare Levy (1.5%)
8
EQUALS Total Tax Payable
9
EQUALS Net Tax Payable
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Item
Salary
Subtotal
Total
$165,000
$2,000
Page 22 of 65
Activity 15 - Gifts
The ATO provides taxpayers with an entitlement to claim a deduction for gifts or donations,
made to "deductible gift recipients" (DGRs).
Please visit the applicable website and list 4 approved "deductible gift recipients"?
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1
2
3
4
Activity 16 - Constitutional Law and Income
Why did the States and territories of Australia give up the right to the federal government to
impose income tax on individuals?
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Activity 17 - Bamford Case
What was the argument of the ATO regarding the taxation of capital gains in a trust?
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What was Bamford argument about the taxation treatment of capital gains arising within a
trust?
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Module 3
Activity 1 - Travel Expenses
Kevin Murphy travels to Europe to look at hairdressing exhibitions and claims a deduction as
“travelling expenses”: Is a person who travels “for” or “on” work, or who is an itinerant
worker, able to deduct the travelling costs.? (please read FCT v Finn.)
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What about your expenses in travelling from your home “to” work?
Activity 2 - Education Expenses
Are your education expenses deductible as work-related expenses under s8-1?
Activity 3 - Education Deductions
Are your education expenses deductible in finding work?
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Activity 4 - Business Deductions
Can Kevin the DJ, a part time drug dealer, claim a loss in purchasing illegal drugs against his
other assessable income ? Explain (FCT v La Rosa [2003] FCAFC 125)
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Activity 5 - Business Deductions
Can the damages paid by a newspaper company to settle a defamation suit be deductible?
(Please see Herald & Weekly Times).
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Activity 6 - Case Study
You are a financial advisor wants advice as to how to best structure the purchase of this
investment property.
Your client John has bought a house to rent out. He paid $300,000, he borrowed $150,000 on
a fixed rate mortgage with 10% interest per annum.
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John’s equity in the investment property is $150,000 from his savings. John has incurred
stamp duty costs on the transfer and mortgage of $8,000. John paid $1,500 to Louis, a
solicitor, to do the conveyancing.
John has paid the mortgagee’s legal costs of $800, as is usual in borrowing transactions of this
kind. John also engaged a real estate agent who found tenants for the property.
The tenants deposited a bond with the state authority of $1,200 and paid rent of $300 per
week. The real estate agent charged John the first week’s rent plus 5% on the weekly rent.
John has insured the house for $300,000 and paid insurance premiums of $500 each year.
John also paid council and water rates of $1,500.
John first wants you to confirm what is the tax treatment for all of these expenditures?
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Activity 7 - Self-employed Superannuation Contributions
Kevin Murphy is a leading hair stylist and is self employed. He comes to you seeking financial
advice based on the following information:



Sole proprietor - business income
Investment Income
Total Assessable Income
$55,000
$15,000
$70,000
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Can Kevin claim a deduction on a $10,000 personal contributions to his complying SMSF and
why?
Activity 8 - Business Deductions
Can the damages paid by a newspaper company to settle a defamation suit be deductible?
(please see Herald & Weekly Times).
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Activity 9 - Business Deductions
Are the initial financial planning advice fees deductible by a client? (please read TD 95/60).
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Activity 10 - Business Deductions
Why are assets such as land and trading stock (inventory) never treated as depreciating assets?
Activity 11 - Business Deductions
Why are assets such as land and trading stock (inventory) never treated as depreciating assets?
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Activity 12 - Depreciation
Kevin Murphy is a leading hair stylist and is self employed. Kevin purchases a new pair of
cutting scissors for $900 and wants to know whether he should depreciate them fully or over
their useful life?
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Please advise Kevin and explain the 2 main methods of calculating depreciation.
(a) Prime cost depreciation method. (straight line depreciation)
(b) Diminishing value depreciation method
Where does depreciation and accumulated depreciation appears in the financial statements of
a business?
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Activity 13 - Interest Payments
Are interest payments tax deductible on your family car? Yes/ No? Why?
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Activity 14 - Tax Offset
What are some examples of tax offsets available in Australia?
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Activity 15 - Deduction and a Tax offset – Interest Payments
What is the difference between a deduction and a Tax offset?
(b)
Provide an example of both a tax deduction and a Tax offset
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(a)
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Activity 16 - Negative Gearing – Interest Payments
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A client, Kevin, attends your office and wants to know the difference between buying an
investment rental property so that it is positively geared or negatively geared.?
(a)
Please explain to Kevin the difference?
(b)
What is the aim of negatively geared any sort investment?
The tenants vacate Kevin’s rental property. Kevin to his dismay discovers the house was being
used as an illegal brothel. Kevin needs to undertake some repairs to his investment rental
property including the replacement of broken light fittings, discovered a hole in a bedroom
wall and repair bedroom doors..
(c)
Are these expenses tax deductible?
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Activity 17 - Carried Forward Losses
Kevin Murphy has carried on a business since 2002. In the year ended 30 June 2002, his
income was 150,000 and he had deductible expenses of 200,000.




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

At 30 June 2003, his income was 300,000 but he had deductible expenses of 350,000. At
30 June 2004, his income was 300,000 but he had deductible expenses of 350,000.
At 30 June 2005, his income was 300,000 but he had deductible expenses of 350,000.
At 30 June 2006, his income was 300,000 but he had deductible expenses of 350,000.
At 30 June 2007, his income was 300,000 but he had deductible expenses of 350,000.
At 30 June 2008, his income was 300,000 but he had deductible expenses of 350,000.
Last year, Kevin had income of 400,000 and expenses of 25,000 as at 30 June 2004.
What are the total carried forward losses that Kevin has at the 30 June 2003?
What are the total carried forward losses that Kevin has at the 30 June 2004?
What are the total carried forward losses that Kevin has at the 30 June 2005?
What are the total carried forward losses that Kevin has at the 30 June 2006?
What are the total carried forward losses that Kevin has at the 30 June 2007?
What are the total carried forward losses that Kevin has at the 30 June 2008?
What are the total carried forward losses that Kevin has at the 30 June 2009?
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Module 4
Activity 1 - Tax Rates
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What is the most tax any taxpayer in Australia should pay? Why?
Activity 2 - What is the advantages of SMSF
What is the advantage and disadvantages of using a SMSF in taxation planning?
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Module 5
Activity 1 - Calculating GST
Using the Kevin Murphy Case Study example above please answer the following questions.
What is the GST rate is Australia’s GST?
If you purchase a loaf of bread for $5 what GST is payable?
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If you purchase a new commercial property worth $2 million what GST is payable?
What are the 3 different types of supplies that can occur under the GST legislation? What is
the key distinction between each of them?
How does the Federal Government collect GST?
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Activity 2 - GST and Financial Services
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If an Investment Funds pays a Fund Manager $400,000 per annum to provide financial
services what sort of supply arises? Please show calculations
What amount of GST is payable? Please show calculations
What RITC can be claimed? Please show calculations
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Activity 3 - GST Checklist Case Study – Part 1
If you work your way through the GST checklist above a financial adviser would be able to
determine the GST outcome of a particular fact situation.
Peter Murphy a famous hairdresser and property developer in Australia. Peter comes to your
financial planning firm, ABCD Financial Planners, to see you in relation to a prospective
commercial property investment he wants to pursue.
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Peter wants to purchase of a block of land in Chapel Street Melbourne for $2million to set up
a new hair salon and redevelop into residential apartments in the future.
Peter brings along a copy of the draft sales agreement and wants you to review the terms of
the agreement and provide financial advice from a GST perspective. You know the land is
currently subject to a lease to a fruit shop but Peter wants to bring the lease to an end.
Peter is currently negotiating for the simultaneous termination of the lease with settlement or
prior to settlement with the vendor of the land, Kevin McDonald who is registered for GST.
As a financial adviser you need to work your way through the GST checklist to advise Peter of
what the GST outcome from the proposed transaction.
1.
Identify what type of supply arises from Peter’s proposed transaction?
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Activity 4 - GST Checklist Case Study – Part 2
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2.
Is it a taxable supply? Are the four criteria of a taxable supply satisfied
Activity 5 - GST Checklist Case Study – Part 3
3.
How much GST is payable on the purchase of the land? Please show your calculations
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Activity 6 - GST Checklist Case Study – Part 4
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4.
When is GST payable? Why
Activity 7 - GST Checklist Case Study – Part 5
5.
Who is liable to the GST? Peter or Kevin?
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Activity 8 - GST Checklist Case Study – Part 6
What is the position of the recipient of the supply? Is Peter entitled to a GST input taxed
credit.? Why/Why not?
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6.
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Activity 9 - GST Checklist Case Study – Part 7
7.
What cash flow and stamp duty problems arise by being entitled to a GST input taxed
credit.?
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Activity 10 - GST Checklist Case Study – Part 8
8.
Can you structure the transaction so that it falls within a GST free category? Please read
the GST Ruling 2002/5
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Module 6
Activity 1 - CGT Assets
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Provide 5 examples of assets that are not CGT assets?
Activity 2 - Rollover versus Exemption
What is the difference between a rollover and an exemption?
Provide 2 examples of each
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Activity 3 - Calculating Capital Gains Tax
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If Peter purchased a house to live in for $100,000 worth of BHP shares on the 1st September
2007 and sold his house (which was his personal place of residence) for $420,000 on June 2008
how much capital gains tax would Peter be liable to pay to the ATO?
If Peter purchased a house to live for $100,000 cash on the 1st September 1984 and sold his
house for $420,000 on June 2008 how much capital gains tax would Peter be liable to pay to
the ATO?
If Peter sells his trading stock of shampoo in the ordinary course of his business. The sale of
an asset in the course of ordinary business gives rise to ordinary income in the hands of Peter.
However the sale of trading stock is also a straightforward example of a CGT event.
Does Peter need to pay income tax or CGT? Why?
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Activity 4 - Calculating Capital Gains Tax –Step 1
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What are the CGT consequences of these transactions?
a.
If Peter sells a parcel of shares for $20,000. He bought the shares in 1982 for $2,600.
What if Peter bought the shares in 1990?
b.
Sue sells her car for $12,500. She bought the car in 1998 for $15,600.
c.
Lee sells her holiday home in Portsea for $300,000. She bought the house in December
1999 for $212,000.
d.
If Peta sells her sailing boat, with 2 sets of sails and other equipment for $4,000. She
bought the boat in 1997 for $6,600 and the other equipment for $800.
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Activity 5 - Calculating Capital Gains Tax –Step 2
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What are the CGT consequences of these transactions?
a.
If Alan and Betty divorce after 20 years marriage. As part of the divorce settlement, they
agree that Alan will transfer her 50% interest in a holiday house to Betty, so Betty owns
100%. The house was bought in 1995 for $150,000 and is now worth $220,000. What are
the consequences to Alan and Betty?
b.
Peter inherited a house from his aunt, that she acquired in 1960. The house had a market
value of $250,000 when Peter inherited it in 2004. This year, John sold the house for
$290,000. Is there any assessable capital gain for John and if so, how much gain is
assessable?
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Activity 6 - Personal Use Assets
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How much is the total net capital gain derived in each of these years: (assuming there is no
special rule applicable, the assets are not personal use assets and indexation is no available)
Year
Asset
Cost Base
Capital Proceeds
Gain/Loss
1
A
$12,000
$10,000
-2,000
B
$15,000
$20,000
+5,000
2
C
$12,000
$10,000
-2,000
3
D
$12,000
$10,000
-2,000
E
$15,000
$18,000
+3,000
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Module 7
Activity 1 - Why does FBT exist
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What are the policy reasons for taxing fringe benefits made by employers to employees?
Activity 2 - FBT - Why does FBT exist
Why was it difficult to do this in practice under Australian income tax law prior to 1986?
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Activity 3 - Who bears FBT
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Under the FBT regime the employer pays FBT obligations. However, in reality, who do you
think bears the tax – the employer or the employee? Why?
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Activity 4 - Marginal Tax Rates and FBT
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If Peter earns $30,000 per year and has a low marginal tax rate of 30%. Is it likely that Peter’s
employer will agree to provide him with fringe benefits taxable to the employer instead of
salary taxable to Peter? Why or why not?
Activity 5 - Gross Up rate
What is the Gross Up rate for fringe benefits that an employer needs to use
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Activity 6 - Benchmark Interest rate
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What is the benchmark interest rate for the fringe benefits tax (FBT) for the year commencing
1 April 2009?
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Activity 7 - Benchmark Interest rate
If Prohair Salon Pty Ltd, a hairdressing business, provides their leading employee Peter with a
low interest loan @ 1%, of $20,000 which was to attend Las Vegas, on the 1st April and no
capital amount was repaid by year end.
Remember the benchmark interest rate is 5.85% (2009/20010 FBT year)
a)
On what amount is FBT assessable? Please show calculations
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FBT payable = (amount of loan) *(benchmark interest rate – interest rate paid)
b)
Using the original gross up formula calculate the FBT payable?
c)
Apply the fringe benefits tax to calculate the FBT payable
Grossed-up Amount =
Total taxable value x
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gross-up rate
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Module 8
Activity 1 - PAYG Withholding Tax
Mark Smith invest $500,000 into NAB shares and fails to quote his TFN. Mark Smith receives
a fully franked dividend of $50,000.
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What amount of tax has been deducted by the company?
Activity 2 - PAYG Withholding and ABN and TFN
Mark comes to see Peter a financial planner and wants to whether an Australian Business
Number (ABN) can be quoted as an alternative to the Tax File Numbers (TFN) for the
purpose of PAYG withholding tax with respect to investment in NAB shares? Why? /Why
not?
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Activity 3 - Pay As You Go (PAYG) instalment
What is PAYG? How do you make payments?
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What are the payment options for PAYG instalments?
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Activity 4 - BAS versus IAS
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What is the difference between a Business Activity Statement (BAS) and Instalment Activity
Statement?
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Activity 5 - PAYG Quarterly Instalment Method
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Garry Gee the Dentist current annual income tax assessment states that he had an income
from investments of $85,000 with a notional tax bill of $12,000.
a)
What would Garry Gee’s PAYG Instalment Rate be if Garry elects to calculate his own
Instalment Amount based on Actual Instalment Income?
b)
Why are quarterly instalments required? Can annual instalments be made? Why /Why
Not?
c)
What would Garry Gee’s PAYG Instalment Rate be if Garry elects to calculate his own
Instalment Amount based on Actual Instalment Income?
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Activity 6 - HELP
Peter has been studying law and commerce for 6 years at Melbourne University and has a
HECS loan of $120,000 outstanding. Peter is currently working in a law firm and is being paid
$50,000 pa.
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What is the minimum threshold for compulsory repayments for HELP debt?
What is Peter’s HECS Repayment Rate? Please show calculations
If Peter was earning $34,000 pa what HELP repayments would need to be made in the current
financial year? Why?
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If Peter never earns any taxable income for the remainder of his working life sue to salary
sacrifice arrangements in place what HELP repayments would need to be made? Why?
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Module 9
Activity 1 - Taxation Planning
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What is the highest tax rate a taxpayer should pay on any assessable income? Why – Please
explain
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Activity 2 - Taxation Planning
Peter Mac, Kevin Murphy and Leanne Gee, who are members of the same extended family.
They establish business producing and selling a new range of haircare products to professional
hair salons called SexyHair.
Sexyhair has revenues of $4 million and deductions of $2.8 million. The profits of Sexyhair
business in the current financial year, after taking into account all allowable deductions is
$1,200,000.
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You are their financial planner and want you to provide advice as to how the profits are to be
taxed if the Sexyhair business is established as a :
1.
Sole Proprietorship;
2.
Sexyhair Partnership;
3.
In a company, Sexyhair Pty Ltd;
4.
In a fixed trust, where the trustee, Sexyhair Pty Ltd holds the business equally on behalf
of Peter, Kevin and Leanne beneficiaries;
5.
In a discretionary trust, where the trustee Sexyhair Pty Ltd holds the business and
Peter, Kevin and Leanne are listed as potential beneficiaries of the trust?
Would your taxation planning advice be different if the Sexyhair business made a tax loss in
the current year of $300,000?
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Activity 2 - Taxation Planning - continued
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Activity 3 - Special Taxpayers - Farmers
Ted is an executive in a large multinational company. Ted's salary is $290,000 for the 2009-10
income year. Ted also has a hobby farm, which runs at a loss each year. In the 2009-10 year,
the hobby farm makes a loss of $40,000.
Under the current law, Ted passes the non-commercial losses real property test and therefore
can claim his business losses. Ted's taxable income has therefore been reduced to $250,000
[$290,000 - $40,000] from $290,000. This provides an unfair tax saving of $18,600.
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Under the proposed changes, Ted's adjusted taxable income (ignoring his business losses) is
$290,000. Does Ted lose the deductions? Why/Why Not?
Under the proposed changes, Ted's adjusted taxable income (ignoring his business losses) is
$240,000. Does Ted lose the deductions? Why/ Why not?
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Module 10
Activity 1 - Taxation Avoidance
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Peter Mac, Kevin Murphy and Leanne Gee, who are members of the same extended family.
They establish business producing and selling a new range of haircare products to professional
hair salons called SexyHair.
Sexyhair has revenues of $4 million and deductions of $2.8 million. The profits of Sexyhair
business in the current financial year, after taking into account all allowable deductions is
$1,200,000.
You are their financial planner and want you to provide advice as Peter Mac proposal to do the
following tax planning strategies :
1.
deduct interest expense for Peter’s private house against the business income;
2.
pay money to his mother in law in Sweden a claim a tax deduction against the business
income
3.
create a loan to his wife and claim a interest deduction;
4.
place 25% ownership of the Sexy hair business in the Peter Mac Family
5.
purchase an investment property through the business and negatively gear
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