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Principles Of Taxation Unearned Income Essay

465 words - 2 pages

SCHOOL OF ACCOUNTANCY
UNIVERSITI UTARA MALAYSIA
BKAT 2013 – PRINCIPLES OF TAXATION
TUTORIAL 3 – UNEARNED INCOME

QUESTION 1
Under what circumstances income derived from rental of properties is taxable under Section 4(a) – Business Income instead of under Section 4 (d) – Investment income?

QUESTION 2
(A) Mr. Rozmi has opted to retire from MR Resources Sdn Bhd in 2011. In 2012, he reported the following with regards to his income:
Pension - optional retirement | 3,000 |
Annuity paid by Bening Insurance Bhd, a Malaysian life insurer | 9,000 |
Malaysian dividend, net | 14,400 |
Royalties from musical composition | 23,000 |
Interest on fixed deposits with Maybank for 15 months' tenure | 16,000 |

Mr Rozmi owns a service apartment, which is let out for rent. The statement of income and expenditure ...view middle of the document...

The statement of rental income and expenditure is as follows:
Rent received: | | | |
December 2011 | | 1,000 | |
Jan—December 2012 | | 12,000 | 13,000 |
Rent received in advance | | | 3,000 |
| | | 16,000 |
Less: | | | |
Housing loan interest: | | | |
* paid in 2012 | 6,000 | | |
* accrued in 2012 | 3,000 | 9,000 | |
| | | |
Quit rent and assessment: | | | |
* 2012 | 400 | | |
* 2013 | 400 | 800 | |
| | | |
Advertisement for new tenant | | 270 | |
Cost of repainting the condominium | | 2,330 | |
| | | (12,400) |
Net profit | | | 3,600 |
Unabsorbed rental loss brought forward | | | 1,000 |
| | | 2,600 |

REQUIRED:
Computed the aggregate income for Mr Ramli and his wife for the year assessment 2012

QUESTION 3
Martin Low a resident in Malaysia writes several articles and books had the following incomes for the year ending 31 December 2012.
a. Royalties
Income
Translation of literary works 36,000
Books written 160,000

b. Rental
House in Subang Jaya
Income
Advance- rental (two months) 2,000
Deposit - electricity and water 400
Rental 12,000
Expenses:
Quit rent and assessment 800
Repairs and maintenance
* upkeep of compound 1,100
* renovation 4,800
House loan payment 6,000
(RM4,000 capital and RM2,000 interest)

c. Dividend
Koperasi UUM Bhd (gross) 11,000
Genting Bhd (net) 450
Baltex (M) Sdn Bhd (pioneer status)(gross) 500

d. Interest
Fixed deposit from MaybankBhd 1,200
Koperasi Nesa Bhd 320
Joseph Low (brother) 5,300

e. Others
Lee Advertisement Sdn Bhd (acting in advertisement) 4,200

REQUIRED:

Compute the total income for Martin Low for the year assessment 2012.

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