Week 6: Statutory Income Flashcards
What is Statutory Income?
Part of AI, that is not ordinary in nature
When is statutory income NOT assessable?
Exempt income + Non-assessable non-exempt income
Regarding allowances, what is the taxpayer’s AI assessed on?
allowances, gratuities, compensations, benefits, bonuses, and premiums to, any employment of or services rendered by the taxpayer.
What is recoupments of deductible amounts
reverses the benefit of deductions allowed for certain losses and outgoings that have been recouped
What is non cash benefits?
benefit that is not convertible into cash is treated as if it were convertible into cash
What is exempt income
ordinary/statutory income that is exempt
What are the types of exempt income?
1st class & 2nd Class
What are 3 examples of non-assessable non-exempt income
GST on a taxable supply s17-5 ITAA97
Income that is a fringe benefit s23L(1) ITAA36
Amounts subject to withholding tax s128D ITAA36
What does ‘specific deductions mean’ and how do they differ to ‘general deductions’?
designed to provide deductions for particular kinds of expenditure that might not otherwise be deductible under the general deduction provision
What are the 7 ‘specific deductions’ provisions?
Tax-related exp
Repairs
Replacement & Restoration
Maintenance
Borrowing exp
Bad debts
Gifts
What is the formula for tax loss?
tax loss for income year = deductions for the income year (other than tax losses from prior yr)- Assessable income and net exempt income for the income year
How can a provision deny or limit deductions?
though an outgoing may satisfy the requirements of a deduction provision, another provision may deny or limit the deduction available
What written evidence should individuals have to claim deductions?
Work expenses
Car expenses
Business travel expenses
What are the 2 methods for deducting car expenses?
Cents per kilometre method
Log book method
What taxes are deductions ‘denied’ for?
Income tax (s 25-5)
GST (s 27-15)
SGC (s 26-95)
Superannuation-related taxes
