Assuming the employer elects to use the operating cost basis, explain and calculate the taxable value of the car fringe benefit and the FBT consequences for Allan’s employer.
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Allan’s employer purchased a car in March 2019 at a cost of $44,000 GST inclusive and provided the car to Allan on 1 July 2019. Allan garages the car at his home each night from 1 July 2019 to 31 March 2020, excluding the month of December 2019. Allan travelled 40,000 kilometres in the car during the year, and the odometer and logbook records show that 20,000 kilometres were for business purposes and 20,000 kilometres were for private purposes. The operating costs of the car (not including deemed
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Assuming the employer elects to use the operating cost basis, explain and calculate the taxable value of the car
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- Allan’s employer purchased a car in March 2019 at a cost of $88,000 GST inclusive and provided the car to Allan on 1 April 2019. Allan garages the car at his home 300 nights during the 2019/20 FBT year. Allan travelled 20,000 kilometres in the car during the year, and the odometer and logbook records show that 10,000 kilometres were for business purposes and 10,000 kilometres were for private purposes. The operating costs of the car (not including deemed depreciation and deemed interest) were $13,000 (GST inclusive). Allan made contribution totalling $1,000 and all the necessary documents for his employer to calculate his FBT liability.Allan’s employer purchased a car in March 2020 at a cost of $44,000 GST inclusive and provided the car to Allan on 1 April 2020. Allan garages the car at his home each night during the 2020/21 FBT year. Allan travelled 40,000 kilometres in the car during the year, and the odometer and logbook records show that 10,000 kilometres were for business purposes and 30,000 kilometres were for private purposes. The operating costs of the car (not including deemed depreciation and deemed interest) were $9,000 (GST inclusive). Allan did not make any contribution but provided all the necessary documents for his employer to calculate his FBT liability. Advise Allan and his employer of the tax consequences of this transaction.Allan’s employer purchased a car in March 2020 at a cost of $44,000 GST inclusive and provided the car to Allan on 1 April 2020. Allan garages the car at his home each night during the 2020/21 FBT year. Allan traveled 40,000 kilometers in the car during the year, and the odometer and logbook records show that 10,000 kilometers were for business purposes and 30,000 kilometers were for private purposes. The operating costs of the car (not including deemed depreciation and deemed interest) were $9,000 (GST inclusive). Allan did not make any contribution but provided all the necessary documents for his employer to calculate his FBT liability. Advise Allan and his employer of the tax consequences of this transaction.
- Nicholas works for Computer Specialists Ltd as a salesman. He is provided with a car that cost the company $45,000 on 1 May 2021. Nicholas used the car from the time that his employer acquired the car. During the FBT year ended 31 March 2022 Nicholas travelled 35,000 km in the car. The car's logbook indicates that the business percentage is 80%. The total operating costs including deemed interest and depreciation are $14,000. Nicholas paid $2,000 of the operating costs for the year ended 31 March 2022. What is the taxable value of the car for the year ended 31 March 2022 using the operating cost basis formula method? a. $9,200 b. $2,950 c. $800 d. $2,800 e. $11,200 Justify your answer by providing calculations.On July 1, 2018, Brent purchases a new automobile for $46,000. He uses the car 82% for business and drives the car for business purposes as follows: 8,000 miles in 2018, 20,000 miles in 2019, 22,400 miles in 2020, and 16,000 miles in 2021. Determine Brent's basis in the business portion of the auto as of January 1, 2022, under the following assumptions: If required, round your computations to the nearest dollar. a. Brent uses the automatic mileage method. Compute his basis adjustments for depreciation for each year. Click here to access the basis adjustment table. 2018: S 2019: S 2020: $ 2021: 2,000 Landhadh 5,200 6,048 4,160 Brent's adjusted basis in the auto on January 1, 2022, is s 17,408 XJos is a Sales Manager. He uses his own car to travel to various locations. He acquired the car on 1 October 2021 for $60,000. The acquisition cost was funded entirely by a loan at an interest rate of 15%. He has determined that the depreciation deduction on the car would be $2,300 for the year. In addition, Jos incurred the following expenses during the year: Registration and insurance = $2,000; Repairs and maintenance = $1,000; and Oil and fuel costs = $1,500. For the period 1 October 2021 to 30 June 2022, Jos estimates that the car travelled 15,000 kilometres, 12,000 of which were for business purposes. You may assume that Jos has maintained all necessary records and a logbook. Required: Calculate Jos's deduction for car expenses under the two methods (cent per kilometre rate 0.72 and logbook) in Div 28 of Income Tax Assessment Act 1997. Assume that depreciation has been adjusted for part-year use and the impact of the car limit
- Mr. O’s employer requires him to use his own vehicle for work and pay all of the vehicle’s operating costs. Mr. O. is not paid commissions. Mr. O. purchased a vehicle on July 1, 2020 for $37,290 including HST. Mr. O. drove this vehicle 25,000 kilometers, of which 15,000 were for work. The capital cost allowance for 2020 is $15,255. During the 6 months he owned vehicle he paid: bank loan interest $1,950 gas and oil 1,840 maintenance 300 insurance 1,400 licence plates 100 Calculate the amount Mr. O. can deduct from employment income. Show all calculations.Mr. O's employer requires him to use his own vehicle for work and pay all of the vehicle's operating costs. Mr. O. is not paid commissions. Mr. O. purchased a vehicle on July 1, 2020 for $37,290 including HST. Mr. O. drove this vehicle 25,000 kilometers, of which 15,000 were for work. The capital cost allowance for 2020 is $15,255. During the 6 months he owned vehicle he paid: bank loan interest $1,950 gas and oil maintenance insurance 1,840 300 1,400 100 licence plates Required: Calculate the amount Mr. O. can deduct from employment income. Show all calculations.On July 1, 2017, Brent purchases a new automobile for $49,000. He uses the car 88% for business and drives the car as follows: 7,000 miles in 2017, 17,500 miles in 2018, 19,600 miles in 2019, and 14,000 miles in 2020. Determine Brent's basis in the business portion of the auto as of January 1, 2021, under the following assumptions: If required, round your computations to the nearest dollar. a. Brent uses the automatic mileage method. Compute his basis adjustments for depreciation for each year. Click here to access the basis adjustment table. 2017: $fill in the blank 5d0ce403cfe2029_1 2018: $fill in the blank 5d0ce403cfe2029_2 2019: $fill in the blank 5d0ce403cfe2029_3 2020: $fill in the blank 5d0ce403cfe2029_4 Brent's adjusted basis in the auto on January 1, 2021, is $fill in the blank 5d0ce403cfe2029_5. b. Brent uses the actual cost method. [Assume that no § 179 expensing is claimed and that 200% declining-balance cost recovery with the half-year convention is…
- On July 1, 2019, Brent purchases a new automobile for $35,500. He uses the car 84% for business and drives the car for business purposes as follows: 8,000 miles in 2019, 20,000 miles in 2020, 22,400 miles in 2021, and 16,000 miles in 2022. Determine Brent's basis in the business portion of the auto as of January 1, 2023, under the following assumptions: If required, round your computations to the nearest dollar. a. Brent uses the automatic mileage method. Compute his basis adjustments for depreciation for each year. Click here to access the basis adjustment table. 2019: $ 2020: $ 2021: $ 2022: $ Brent's adjusted basis in the auto on January 1, 2023, is $ b. Brent uses the actual cost method. [Assume that no § 179 expensing is claimed and that 200% declining-balance cost recovery with the half-year convention is used. The recovery limitation for an auto placed in service in 2019 is as follows: $10,100 (first year), $16,100 (second year), $9,700 (third year), and $5,760 (fourth year).]…From 1 March 2021 to 28 February 2022, employee A used her own vehicle for business purposes. She received a travelling allowance of R20 000 per month for this purpose. She travelled a total of 65 000 kilometers during the year of which 45 000 kilometers was for private travel. She kept an accurate logbook during the period she received the travel allowance. She purchased a motor vehicle for R660 000 (including VAT) on 28 February 2020. Finance charges for the current year was R105 000 and insurance was R3 500 a month, fuel was R7 000 a month and maintenance was R12 000 for the period. Do not use R, brackets, spaces, signs or decimals (unless specifically instructed) The deemed cost per kilometer is R?? (calculate to 3 decimals) Blank 1 Travel allowance for the year: Blank 2 Wear and tear: Blank 3 Finance charges: Blank 4 Insurance: Blank 5 Fuel: Blank 6 Maintenance: Blank 7 Actual cost per kilometer in Rand (calculate to 3 decimals): Blank 8 Possible deduction allowed for business…Francis bought his primary residence for $175,000 in the summer of 2017. At closing, he also paid $500 for title insurance and $215 to record the deed. In the spring of 2021, Francis paid $1,625 to remodel the master bath. In the late summer of 2021, he spent $150 for supplies to paint the first floor rooms. In the fall of 2021, Francis replaced the furnace with a qualified energy- efficient one. He spent $1,500 for the new furnace and claimed a $450 credit for it on his 2021 tax return. What is Francis's adjusted basis in the house? $177,890 $178,125 $178,390 $179,440