Ms. Sim took out a bank loan on 1 January 2018 to buy a residential apartment unit for rental purposes. The apartment obtained its temporary occupation permit on 1 April 2018 and was rented out on the same day. Sim’s income and expenses relating to the rental apartment in the year 2018 are as follows: Sim always calculates her rental income using the most beneficial method. a. Gross rental income 36,000 b. Less: Interest expense on bank loan (6,000)


Taxation
Coursework

Coursework – Individual Assignment – 30 Marks

oDue Date:

ATTEMPT ALL QUESTIONS BELOW:

1.Ms. Catherine works in a beauty salon as a beautician. During the year 2018, in addition to her base salary, Catherine received the following amounts:

a.Salary for the year $30,000

b.Contractual Bonus for the year 2018 but not paid as of 31 Dec 2018, $3,000

c.Personal tips from customers $8,000

d.Compensation received from a customer who wrongly accused Catherine of a failed beauty procedure $20,000

e.Alimony received from ex-spouse $6,000

f.Attended a beautician certification course and paid out of pocket, $1,000

Compute Catherine’s tax liability for the year of assessment 2019 with detailed workings? (6 Marks)

2.Ms. Sim took out a bank loan on 1 January 2018 to buy a residential apartment unit for rental purposes. The apartment obtained its temporary occupation permit on 1 April 2018 and was rented out on the same day. Sim’s income and expenses relating to the rental apartment in the year 2018 are as follows:

Sim always calculates her rental income using the most beneficial method.

a. Gross rental income 36,000
b. Less: Interest expense on bank loan (6,000)
c. Property maintenance charges (7,000)

–––––––

23,000

–––––––

Compute Sim’s tax liability for the year of assessment 2019 with detailed workings? (6 Marks)

1

Taxation
Coursework

3.Mr Ted, aged 45, is a United States (US) citizen who relocated to Singapore to work for U Singapore Pte Ltd (USPL) on 1 April 2018. USPL is a wholly owned subsidiary of U Inc. Ted’s remuneration package in 2018 included the following:

$
1. Joining bonus (Ted received the bonus upon completion of one year’s service on 31 March 2019) 36,000
2. Salary 240,000
3. Air ticket (business trip) 2,000
4. Air ticket – two home leave passages 4,000
5. Apartment (note 1)
6. Birthday gift (note 2) 500

Notes:

(1)USPL rented a fully furnished apartment at a monthly rental cost of $8,000. The annual value of the apartment is $50,000. Ted paid a monthly rental contribution of $500 to USPL.

(2)Birthday gifts are given to all USPL employees.

In addition to his employment income, Ted received the following income in 2018:

$

7.Income distribution from an equity investment in the Marco Polo Fund, a US fund.

Ted deposited the receipts into his Singapore bank account 30,000
8. Interest income from a Singapore pawnshop 2,000

9.Made a cash donation of to the National Kidney Foundation, an approved institution of a

public character on 25 December 2018. 10,000

Required:

Compute Ted’s Tax Liability for the year of assessment 2019.

(10 Marks)

4.Briefly explain any TWO deductible and TWO non-deductible business expenses as per IRAS with suitable examples for each (8 Marks)

THE END

2

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