ASSESSABLE INCOME

ASSESSABLE INCOME
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Question 1:
During the current tax year Erin received the following amounts:
• Salary and wages income of $98,000.
• A car allowance of $1,000 from her employer.
• $4,200 interest from a bank term deposit of $50,000.
• $500 per week for 50 weeks of the year from a rental property she owns.
• Winnings of $10,000 from a lottery.
• $500 from selling homegrown fruit and vegetables to friends.
• A holiday bonus of $1,000 from her employer.
• A watch worth $200 from a happy client.
What is Erin’s ordinary income for the current tax year?
Question 2:
Consider the following situations and discuss whether they are income under ordinary
concepts:
• A cash prize for being the best student in income tax law received by a student who
also receives a Youth Allowance from the government.
• A gratuity received by a widow from her husband’s former employer in recognition of
her husband’s services.
• A bonus received by an employee for a suggestion adopted by the management.
Question 3:
On 18 Match 2020, Jane sustained a serious injury at work. On 1 June 2020 her
employer paid her the amount of $20,000 for the personal injury and suffering that she
endured. This payment consisted of the following components:
• A workers’ compensation payment for 8 weeks of lost income ($10,000)
• Damages awarded by a court for a personal injury claim ($10,000)
Question 4:
Indicate whether the following statement is true or false and include a brief explanation
in your answer:
Bar attendants must keep a tally of the tips they receive at work and declare them as
assessable income in their income tax returns.
Question 5:
Indicate whether the following statement is true or false and include a brief explanation
in your answer:
Mutual receipts derived by a club are a type of assessable income.