Nick invests in several companies and received the following dividends during the current year:Dividend excluding franking credits ($) Franking Credit ($)CompanyShelly Petroleum Ltd10,4005,200Great Lobster Balls Of Fire Ltd 25,200Based on the above facts and relevant tax laws, how should Nick treat the amounts received from these investments?(select the best answer)ABCOnly dividends totalling $15,600 should be recognised as statutory income and only franking credits totalling$5,200 should be recognised as a refundable tax credit.Dividends totalling $40,800 should be recognised as statutory income and franking credits totalling $5,200should be recognised as a refundable tax credit.Dividends totalling $35,600 should be recognised as statutory income and franking credits totalling $5,200should be recognised as a refundable tax credit.DDividends totalling $10,400 should be recognised as ordinary income and franking credits totalling $5,200 shouldbe recognised as a refundable tax credit.TrueFalseWhen returning from his lobster catching trip, Nick was fined $6,000 by Fisheries officers who inspected his catch andfound 2 undersized lobsters in his possession.Based on the above facts and relevant tax laws, Nick can claim this amount as a deduction because it relates to hisbusiness activities.

Franking credits are a type of tax credit that Australian companies can pass on to their…

Answered: Based on the above facts and relevant…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Indicate which of the following statements on the taxation of income from real estate under Personal Income Tax is correct: Income from real estate will be allocated to the general taxable base. Should this income be negative, it can be offset exclusively against capital gains in the savings taxable base. A 60% tax reduction on the net income is granted in any case. Income from real estate will be allocated to the savings taxable base. Which of the following types of income MUST NOT be allocated to the savings taxable base? Dividends from a quoted company O The payment of a public subsidy linked to the constitution of a start-up corporation project Income from the redemption of units in a collective investment undertaking Income from the transfer of a bond
4
In your own words, describe the similarities and differences between tax credits and tax deductions. Your response must include two (2) examples of each kind and a discussion on why you think credits are better than deductions, or if deductions are better than credits, or maybe you think they are equal! Tell us why you feel this way.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
There are many tax rules and regulations you should be aware of when investing-whether it be in stocks; bonds; mutual funds; real estate; or collectibles such as artwork, antiques, gems, memorabilia, stamps, and coins. Capital gains are proceeds derived from these types of investments. Unless they are specified as being tax-free, such as municipal bonds, you must pay capital gains taxes on these proceeds. Capital gains are taxed in one of two ways. If the investment is held for one year or less, this is considered short-term and is taxed as ordinary income at your regular income tax rate. As this is written, if the investment is held for more than one year, it is considered long-term and qualifies for various tax discounts, as follows for single taxpayers with earnings as shown below. Stocks Held Capital Gains Rates Up to $38,700 $38,700–$426,700 Over $426,700 Over 1 year(long-term) 0% 15% 20% (a) If you are in the 23% tax bracket for ordinary income and have a 15% capital…
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Which of the following statements are correct? i. A tax resident is normally liable to tax on their worldwide, profits, income, and gains, whether received. ii. Non-residents are generally liable to tax on certain income and profits generated from sources within the country. iii. A domiciled taxpayer is normally liable to tax on their worldwide, profits, income, and gains, whether received. iv. Tax is imposed on certain sources of income, such as interest, dividends, royalties, and fees, by way of withholding tax. a. i, ii and iv b. i only c. All of the above d. i, iii and iv
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If the IRS increases the capital gain tax, institutional investors' preference for dividends versus repurchases would: a. prefer dividends b. I don't know c. not change d. prefer repurchases
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