William graduated with a MBA degree almost 30 years ago

He is now a senior administrator working for the Federal Government. He is required to complete a tax return for the current financial year which is the year ending 30th June 2019.

In the current year he has a base salary of $130,000 per year. He also was paid $20,000 for overtime during the current financial year.

As required by law, the Federal Government paid superannuation at the rate of 9.5% into an approvedsuperannuation fund for him in the current year.

The Federal Government also deducted $47,000 in PAYG from his salary and overtime and paid that to the ATO.

William also bought a rental property on 4 July 2018 for $1,500,000. He borrowed $1,250,000 of this money on the same day from the bank to buy the property. The term of the loan was 20 years. The property was leased on 4 July 2018. He received rent in cash from his tenants during the year ended 30 June 2019 in the amount of $285,000. He also received $15,000 in cash on 29 June 2019 as rent for the month of July 2019.

William incurred the following expenses during the year ended 30 June 2019 in relation to the property:

Repairs made on 15 July 2018 to the fence damaged in a storm in June 2018 $28,200

Repayments on the loan (comprising interest of $95,000 and principal of $55,000) $150,000

Loan application fee (paid on 1 July 2018) $3,500

Legal expenses for the mortgage for the loan (paid on 1July 2018) $2,500

Building a second storey on the property on 1 March 2019$292,000

Dishwasher purchased 1 August 2018 $1,200

The taxpayer wants to minimise his taxable income for this year. Assume all depreciating assets, if any, have an effective life of 5 years. He does not wish to use the SBE election.

Required:

Calculate Williams taxable income or loss for the year ended 30 June 2019.

You must give reasons for your answer. Your discussion must include an analysis of the pertinent sections of the relevant legislation, rulings and the relevant case law. If relevant, you must show your calculation. You must applythe law to the facts in the question and provide YOUROWN analysis of the issues. You should divide the relevant amounts into income or deductions or indicate nil when it is neither.