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Q101 | FBT | Board fringe benefit – taxable value of board meals | Fringe benefits tax | 2025-26 | easy | ["FBTAA 1986 s 35", "FBTAA 1986 s 36", "FBTAA 1986 s 37"] | https://www.ato.gov.au/forms-and-instructions/fringe-benefits-tax-return-2026-instructions/item-23-fringe-benefit-categories-for-fbt-return-2026 | Highmoor Station Pty Ltd provides board fringe benefits valued at $18,250 to its employees for the FBT year ending 31 March 2026 (the taxable value of a board fringe benefit is $2 per meal per person). The employer does not require employees to make any contribution towards their board meals and accommodation, and the ... | $34,434.10 | $9,125.00 | $8,577.50 | $18,250.00 | D | $18,250.00 | 18,250 | AUD | Taxable value of a board fringe benefit is $2 per meal per person ($1 if under 12), reduced by any employee contribution → Gross taxable value of the board fringe benefits for the year = 18,250 → Employee contribution = 0 → Otherwise deductible reduction = 0 (the meals would not have been deductible to the employees) →... | {"$34,434.10": "Grossed up the board taxable value by the Type 2 factor instead of reporting the pre-gross-up value", "$9,125.00": "Wrongly halved the value as if the $1 under-12 child rate applied to everyone", "$8,577.50": "Reported the FBT payable (47% of the value) instead of the taxable value", "$18,250.00": "Corr... | {"formula": "gross_taxable_value - employee_contribution - reductions", "params": {"gross_taxable_value": 18250, "employee_contribution": 0, "reductions": 0}, "expected": 18250.0} |
Q102 | FBT | Employee contribution exceeding the taxable value – floored at zero | Fringe benefits tax | 2024-25 | medium | ["FBTAA 1986 s 9", "FBTAA 1986 s 23"] | https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/fringe-benefits-tax/exemptions-concessions-and-other-ways-to-reduce-fbt/reducing-your-fbt-liability | Eastgate Pty Ltd provides an expense payment fringe benefit to its employee, Hiro, with a taxable value (before any contribution) of $3,000. Under the salary arrangement Hiro pays the employer an after-tax employee contribution of $3,200 towards the cost of the benefit. The employer includes the contribution in its ass... | -$200 | $6,200 | $3,000 | $0 | D | $0 | 0 | AUD | Taxable value before contribution = $3,000 → Employee contribution = $3,200 → An employee contribution reduces the taxable value, but the taxable value cannot go below zero → Taxable value = max($3,000 - $3,200, 0) = $0 | {"-$200": "Subtracted the contribution without flooring at zero, producing a negative taxable value of -$200", "$6,200": "Added the contribution to the taxable value instead of subtracting it", "$3,000": "Ignored the employee contribution and left the taxable value at $3,000", "$0": "Correct answer"} | {"formula": "max(taxable_value - employee_contribution, 0)", "params": {"taxable_value": 3000, "employee_contribution": 3200}, "expected": 0.0} |
Q103 | GST | GST adjustment on cancelling registration – 1/11 x market value x business-use % | GST | 2016-17 | medium | ["GST Act Div 138", "GST Act s 138-5"] | https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/rules-for-specific-transactions/business-asset-transactions/gst-and-the-disposal-of-capital-assets | Mr Okafor ceases business and cancels his GST registration. He still holds a motor vehicle that has a market value of $33,000, on which he had claimed GST credits in an earlier activity statement. The vehicle is used 60% for business purposes. On cancelling registration he must make an increasing adjustment for the GST... | $1,980 | $3,000 | $1,200 | $1,800 | D | $1,800 | 1,800 | AUD | GST adjustment on cancellation = 1/11 x market value x percentage of business use → = (1/11) x 33,000 x 60% → = 3,000 x 0.60 = 1,800 | {"$1,980": "Took 10% of the market value instead of 1/11 before applying business use", "$3,000": "Ignored the 60% business-use proportion and used the full 1/11 of market value", "$1,200": "Used the 40% private-use proportion instead of the 60% business-use proportion", "$1,800": "Correct answer"} | {"formula": "(1 / 11) * market_value * business_use", "params": {"market_value": 33000, "business_use": 0.6}, "expected": 1800.0} |
Q104 | Rental property | Net rental income or loss (gross rent minus total expenses) | Income tax (rental) | 2024-25 | easy | ["ITAA 1997 s 8-1", "ITAA 1997 s 6-5"] | https://www.ato.gov.au/forms-and-instructions/rental-properties-2025/worksheet-work-out-your-net-rental-income-or-loss | A rental property owner completes the ATO rental property worksheet. The gross rent is $14,200 (rental income $13,100 plus other rental-related income $1,100). The total of all deductible rental expenses for the year (advertising, body corporate, borrowing expenses, cleaning, council rates, decline in value, gardening,... | $42,050 | -$13,650 | -$19,350 | $13,650 | B | -$13,650 | -13,650 | AUD | Gross rent = rental income 13,100 + other rental-related income 1,100 = 14,200 → Total expenses = 27,850 → Net rental income or loss = 14,200 - 27,850 = -13,650 (a net rental loss) | {"$42,050": "Added rent and expenses instead of subtracting expenses from rent", "-$13,650": "Correct answer", "-$19,350": "Forgot to include the $800 of other rental-related income in gross rent", "$13,650": "Subtracted in the wrong order, reporting the loss as a positive amount"} | {"formula": "gross_rent - total_expenses", "params": {"gross_rent": 14200, "total_expenses": 27850}, "expected": -13650.0} |
Q105 | Superannuation | Non-concessional contributions cap – bring-forward (3x annual cap) | Superannuation (non-concessional contributions cap) | 2026-27 | medium | ["ITAA 1997 s 292-85", "ITAA 1997 s 292-85(3)"] | https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions/non-concessional-contributions-cap | From 1 July 2026 the annual non-concessional contributions cap is $130,000. Genevieve, who is under 75 with a total super balance below the relevant limit, triggers the 3-year bring-forward arrangement in 2026-27. Once triggered, the bring-forward cap is locked to the first-year cap and any later indexation (for exampl... | $390,000 | $260,000 | $410,000 | $130,000 | A | $390,000 | 390,000 | AUD | Annual non-concessional cap in the first (trigger) year = $130,000 (cap kept fixed from the base example) → The bring-forward arrangement allows 3 times the first-year annual cap → Bring-forward cap = 130,000 x 3 = $390,000 (indexation in years 2 and 3 does not change this) | {"$390,000": "Correct answer", "$260,000": "Brought forward only 1 extra year (2x cap) instead of 2 extra years (3x cap)", "$410,000": "Wrongly indexed years 2 and 3 to $140,000, giving $410,000 (the cap is locked to the first-year amount)", "$130,000": "Used the single annual cap without applying the bring-forward arr... | {"formula": "annual_cap * 3", "params": {"annual_cap": 130000, "indexed_cap": 140000}, "expected": 390000.0} |
Q106 | FBT | Car fringe benefit – operating cost method (no employee contribution) | Fringe benefits tax (car fringe benefits) | 2016-17 | easy | ["FBTAA 1986 s 10", "FBTAA 1986 s 10(2)"] | https://www.ato.gov.au/forms-and-instructions/fringe-benefits-tax-return-2017-completing-your-return/fringe-benefit-categories/b-cars-using-the-operating-cost-method | Coral Coast Plumbing has a car with $14,000 in total operating costs for the year ending 31 March 2017. The employee who uses the car, Hugo Marsden, maintains a logbook. Based on the logbook and other usage patterns, the employer estimates the percentage of private use to be 40% (and therefore the business use percenta... | $8,400 | $5,600 | $2,800 | $14,000 | B | $5,600 | 5,600 | AUD | Operating cost method: taxable value = total operating costs x private use % - employee contribution → Equivalently = total operating costs x (1 - business use %) - employee contribution → = 14,000 x 40% - 0 = 5,600 | {"$8,400": "Applied the 60% business use percentage instead of the 40% private use percentage", "$5,600": "Correct answer", "$2,800": "Wrongly halved the taxable value as if a 50% discount applied", "$14,000": "Used the full operating costs without applying the private use percentage"} | {"formula": "operating_costs * private_use_percent", "params": {"operating_costs": 14000, "private_use_percent": 0.4, "business_use_percent": 0.6, "employee_contribution": 0}, "expected": 5600.0} |
Q107 | Superannuation | Low income super tax offset (LISTO) | Superannuation (low income super tax offset) | 2022-23 | easy | ["Superannuation (Government Co-contribution for Low Income Earners) Act 2003 s 12B", "Superannuation (Government Co-contribution for Low Income Earners) Act 2003 s 12C"] | https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/how-to-save-more-in-your-super/government-super-contributions/low-income-super-tax-offset | Nadia earns $33,000 a year as a childcare assistant. In 2022-23 her employer makes a super guarantee concessional contribution of $3,600 into her super fund. She lodges a tax return with $1,000 of deductions, giving an adjusted taxable income of $32,000, which is under the $37,000 LISTO income limit, and she meets all ... | $360 | $270 | $540 | $500 | D | $500 | 500 | AUD | Concessional (before-tax) contributions = $3,600 → LISTO = 15% x 3,600 = $540 → Capped at the $500 maximum (same cap as the base example), so Nadia receives $500 | {"$360": "Used a 10% rate instead of the 15% LISTO rate", "$270": "Halved the offset as if the rate were 7.5%", "$540": "Applied 15% without capping at the $500 maximum", "$500": "Correct answer"} | {"formula": "min(concessional * listo_rate, max_listo)", "params": {"concessional": 3600, "listo_rate": 0.15, "max_listo": 500}, "expected": 500.0} |
Q108 | CGT | Main residence partial exemption – days-based apportionment | Income tax (CGT) | 2013-14 | medium | ["ITAA 1997 s 118-185", "ITAA 1997 s 104-10"] | https://www.ato.gov.au/forms-and-instructions/capital-gains-tax-guide-2014/part-a-about-capital-gains-tax/real-estate-and-main-residence/partial-exemption | Bridget bought a house on 1 hectare of land under a contract settled on 1 July 1991 and moved in immediately. On 1 July 1995 she moved out and rented out the house, and did not choose to treat it as her main residence for that period. A contract for the sale was entered into on 1 July 2013 (settled 31 August 2013) and ... | $120,000.00 | $30,000.00 | $149,999.20 | $60,000.00 | A | $120,000.00 | 120,000 | AUD | Partial exemption formula: total capital gain x (non-main-residence days / total ownership days) → Taxable portion = 150,000 x (5,840 / 7,300) → = 150,000 x 0.80000 = 120,000 | {"$120,000.00": "Correct answer", "$30,000.00": "Used main-residence days in the numerator instead of non-main-residence days", "$149,999.20": "Subtracted the day ratio from the gain instead of multiplying", "$60,000.00": "Wrongly applied a 50% CGT discount to the apportioned gain in this example"} | {"formula": "total_gain * non_main_days / total_days", "params": {"total_gain": 150000, "non_main_days": 5840, "total_days": 7300}, "expected": 120000.0} |
Q109 | Depreciation | Low-value pool – closing balance | Income tax (capital allowances, Div 40 low-value pool) | 2019-20 | medium | ["ITAA 1997 s 40-445", "ITAA 1997 s 40-440"] | https://www.ato.gov.au/forms-and-instructions/depreciating-assets-guide-2020/low-value-pools | Following on from Priya's low-value pool example: the closing pool balance for 2018-19 was $8,000, the taxable-use cost of the scanner added in 2019-20 was $728, and the decline in value of the pool for 2019-20 was $3,137. The closing balance equals the prior closing balance plus assets added during the year, less the ... | $5,591 | $8,728 | $4,863 | $4,135 | A | $5,591 | 5,591 | AUD | Closing pool balance for 2018-19 = 8,000 → plus taxable-use cost of the scanner added in 2019-20 = 728 → less decline in value of the pool for 2019-20 = 3,137 → Closing balance = 8,000 + 728 - 3,137 = 5,591 | {"$5,591": "Correct answer", "$8,728": "Forgot to subtract the year's decline in value", "$4,863": "Forgot to add the cost of the scanner allocated during the year", "$4,135": "Subtracted the new asset cost instead of adding it"} | {"formula": "prior_closing + new_cost_taxable - decline", "params": {"prior_closing": 8000, "new_cost_taxable": 728, "decline": 3137, "pool_rate": 0.375}, "expected": 5591.0} |
Q110 | Study and training loans | Repayment income build-up (taxable income + RFB + TNIL + RSC + exempt foreign income) | Study and training support loan – repayment income | 2025-26 | easy | ["Higher Education Support Act 2003 s 154-5", "ITAA 1997 s 995-1 (repayment income)"] | https://www.ato.gov.au/tax-rates-and-codes/study-and-training-support-loans-rates-and-repayment-thresholds | In the 2025-26 financial year, Marcus has a taxable income of $61,300, total reportable fringe benefits of $6,200, a total net investment loss of $2,400, reportable super contributions of $18,000, and exempt foreign employment income of $3,100.
What is Marcus's repayment income for 2025-26 (the amount used to work out... | $91,000 | $61,300 | $84,800 | $88,600 | A | $91,000 | 91,000 | AUD | Repayment income = taxable income + reportable fringe benefits + total net investment loss + reportable super contributions + exempt foreign employment income → = 61,300 + 6,200 + 2,400 + 18,000 + 3,100 → = 91,000 | {"$91,000": "Correct answer", "$61,300": "Used taxable income alone as the repayment income", "$84,800": "Omitted reportable fringe benefits from the repayment income build-up", "$88,600": "Omitted the total net investment loss from the build-up"} | {"formula": "taxable_income + reportable_fringe_benefits + total_net_investment_loss + reportable_super + exempt_foreign_income", "params": {"taxable_income": 61300, "reportable_fringe_benefits": 6200, "total_net_investment_loss": 2400, "reportable_super": 18000, "exempt_foreign_income": 3100}, "expected": 91000.0} |
Q111 | FBT | Property fringe benefit – in-house, 75% of notional value (manufacturing seconds) | Fringe benefits tax | 2024-25 | medium | ["FBTAA 1986 s 42"] | https://www.ato.gov.au/law/view/document?DocID=SAV/FBTGEMP/00018&PiT=99991231235958 | Baseline Sports Manufacturing makes tennis racquets for sale by wholesale. Some racquets are damaged during manufacturing. Instead of the normal arm's length selling price (including GST) of $80, the damaged racquets have a market (notional) value of $48 each. An employee, Reuben Castle, buys a damaged racquet for $8. ... | $40 | $36 | $28 | $52 | C | $28 | 28 | AUD | Goods similar (but not identical) to those sold in the ordinary course of business: taxable value = 75% of the notional (market) value, reduced by any employee contribution → Notional value of the damaged racquet = 48 → 75% x 48 = 36.00 → Reduce by the employee contribution: 36.00 - 8 = 28.00 | {"$40": "Forgot to apply the 75% rule to the notional value", "$36": "Forgot to deduct the $8 employee contribution", "$28": "Correct answer", "$52": "Used the $80 normal arm's length price instead of the $48 notional value of the damaged goods"} | {"formula": "notional_value * in_house_rate - employee_contribution", "params": {"notional_value": 48, "arms_length_price": 80, "in_house_rate": 0.75, "employee_contribution": 8}, "expected": 28.0} |
Q112 | CGT | Net capital loss carried forward – no discount, reported as a loss | Income tax (CGT) | 2024-25 | medium | ["ITAA 1997 s 102-10", "ITAA 1997 s 102-15", "ITAA 1997 s 102-5"] | https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/calculating-your-cgt/how-to-calculate-your-cgt | In 2024-25 Hana makes a discount-eligible capital gain of $8,000 on shares held for 4 years. In the same year she makes a $15,000 capital loss on an investment property. She has no prior-year capital losses. Following the ATO steps, capital losses are subtracted from capital gains (step 5) before any discount is applie... | $15,000 | $11,000 | $3,500 | $7,000 | D | $7,000 | 7,000 | AUD | Subtract capital losses from capital gains BEFORE the discount: 8,000 - 15,000 = -7,000 → The result is below zero, so there is no net capital gain and the 50% discount is never applied → The $7,000 net capital loss is carried forward to future income years | {"$15,000": "Carried forward the gross property loss and ignored the offsetting share gain", "$11,000": "Trap: discounted the $8,000 gain by 50% before offsetting, inflating the carried-forward loss to 11,000", "$3,500": "Applied the 50% discount to the net capital loss (losses are never discounted)", "$7,000": "Correc... | {"formula": "property_loss - share_gain", "params": {"share_gain": 8000, "property_loss": 15000, "discount_rate": 0.5}, "expected": 7000.0} |
Q113 | GST | Apportionment for partly creditable purpose – car credit x business-use % | GST | 2025-26 | medium | ["GST Act s 11-30", "GST Act s 69-10"] | https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/motor-vehicle-and-transport/gst-and-motor-vehicles/purchasing-a-motor-vehicle | Nadia purchases the same new non fuel-efficient car for $84,500 on 12 July 2025, where the 2025-26 car limit is $69,674 and the maximum GST credit for 100% business use would be $6,334 (1/11 x $69,674). However, Nadia plans to use the car only 40% in carrying on her business, so she can claim only the business-use prop... | $6,334.00 | $2,786.96 | $2,533.60 | $230.33 | C | $2,533.60 | 2,533.6 | AUD | Maximum GST credit (100% business use) = 69,674 / 11 = 6,334 → Nadia uses the car 40% for business, so she claims only the business-use proportion → GST credit = 6,334 x 40% = 2,534 | {"$6,334.00": "Claimed the full $6,334 without apportioning for 40% business use", "$2,786.96": "Took 10% of the car limit instead of 1/11 before applying the 40% business use", "$2,533.60": "Correct answer", "$230.33": "Divided by 11 twice when applying the cap and the credit"} | {"formula": "car_limit / 11 * business_use", "params": {"car_limit": 69674, "business_use": 0.4}, "expected": 2533.6} |
Q114 | Superannuation | Super guarantee – ordinary time earnings x SG rate | Superannuation (super guarantee) | 2025-26 | easy | ["Superannuation Guarantee (Administration) Act 1992 s 19", "Superannuation Guarantee (Administration) Act 1992 s 23"] | https://www.ato.gov.au/businesses-and-organisations/super-for-employers/super-guarantee-employer-obligations-online-course/module-4-calculating-super-guarantee | During the first quarter of 2025-26, Imogen's ordinary time earnings (OTE) are $9,500. The super guarantee rate for 2025-26 is 12%.
How much super guarantee must Imogen's employer contribute for the quarter?
A. $9,500.00
B. $1,140.00
C. $1,045.00
D. $1,092.50 | $9,500.00 | $1,140.00 | $1,045.00 | $1,092.50 | B | $1,140.00 | 1,140 | AUD | Ordinary time earnings for the quarter = $9,500 → Super guarantee rate for 2025-26 = 12% (rate kept fixed from the base example) → SG = 9,500 x 12% = $1,140 | {"$9,500.00": "Forgot to apply the SG rate to ordinary time earnings", "$1,140.00": "Correct answer", "$1,045.00": "Used the 2023-24 SG rate of 11% instead of 12%", "$1,092.50": "Used the 2024-25 SG rate of 11.5% instead of 12%"} | {"formula": "ote * sg_rate", "params": {"ote": 9500, "sg_rate": 0.12, "old_rate": 0.115}, "expected": 1140.0} |
Q115 | Employment | PAYG instalments – varying the instalment amount (4th quarter balance) | Income tax (PAYG instalments) | 2024-25 | medium | ["TAA 1953 Sch 1 s 45-110", "TAA 1953 Sch 1 s 45-205"] | https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/how-to-vary-your-payg-instalments | Continuing Devon's example: his estimated tax on instalment income for the full year is $24,000. He paid $8,000 in the first quarter, $8,000 in the second quarter, and his varied third-quarter instalment was $2,000. In the fourth quarter he must pay 100% of his estimated tax for the year minus the amounts paid in the f... | $8,000 | $0 | $6,000 | $18,000 | C | $6,000 | 6,000 | AUD | Fourth-quarter instalment = 100% of estimated tax − amounts paid in Q1, Q2 and Q3 → = $24,000 − ($8,000 + $8,000 + $2,000) → = $24,000 − $18,000 = $6,000 | {"$8,000": "Forgot to subtract the third-quarter instalment of $2,000", "$0": "Applied the 75% third-quarter proportion instead of 100% in the final quarter", "$6,000": "Correct answer", "$18,000": "Added up the instalments already paid instead of working out the remaining balance"} | {"formula": "est_tax - (q1 + q2 + q3)", "params": {"est_tax": 24000, "q1": 8000, "q2": 8000, "q3": 2000}, "expected": 6000.0} |
Q116 | FBT | Grossed-up taxable value then FBT payable (Type 1, GST credit) | Fringe benefits tax | 2024-25 | medium | ["FBTAA 1986 s 5B", "FBTAA 1986 s 136(1)"] | https://www.ato.gov.au/tax-rates-and-codes/fringe-benefits-tax-rates-and-thresholds | Westfold Pty Ltd provides fringe benefits to its employees with a total taxable value of $5,000 for the FBT year ending 31 March 2025. The employer was entitled to GST credits on all of these benefits, so they are Type 1 benefits. The FBT rate is 47% and the Type 1 gross-up rate is 2.0802.
What is the FBT payable on t... | $2,350.00 | $4,888.47 | $10,401.00 | $4,433.98 | B | $4,888.47 | 4,888.47 | AUD | Type 1 benefits (GST credit available) are grossed up at 2.0802 → Grossed-up taxable value = $5,000 x 2.0802 = $10,401.00 → FBT payable = grossed-up value x 47% = $10,401.00 x 0.47 = $4,888.47 | {"$2,350.00": "Applied 47% FBT to the taxable value without grossing it up first", "$4,888.47": "Correct answer", "$10,401.00": "Reported the grossed-up taxable value as the FBT payable, forgetting to apply the 47% rate", "$4,433.98": "Used the Type 2 gross-up rate (1.8868) although GST credits were available, understa... | {"formula": "round(taxable_value * gross_up_t1 * fbt_rate, 2)", "params": {"taxable_value": 5000, "gross_up_t1": 2.0802, "gross_up_t2": 1.8868, "fbt_rate": 0.47}, "expected": 4888.47} |
Q117 | Income tests | Division 293 tax – 15% on the lesser of contributions and the excess over $250,000 | Income tax – Division 293 tax | 2025-26 | medium | ["ITAA 1997 Division 293", "Taxation (Division 293 Tax) (Imposition) Act 2012"] | https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions/division-293-tax-on-concessional-contributions-by-high-income-earners | Petra's Division 293 income is $244,000 and her Division 293 super contributions are $12,000, a combined total of $256,000. Division 293 tax is 15% of the lesser of the super contributions or the amount of the combined total above the $250,000 threshold.
What is Petra's Division 293 tax payable?
A. $38,400
B. $1,800
... | $38,400 | $1,800 | $900 | $36,600 | C | $900 | 900 | AUD | Combined Division 293 income and contributions = 244,000 + 12,000 = 256,000, which is above the $250,000 threshold (same side as the base example) → Amount above the $250,000 threshold = 256,000 - 250,000 = 6,000 → Taxable contributions = lesser of contributions ($12,000) and the excess ($6,000) = 6,000 (the excess is ... | {"$38,400": "Applied 15% to the full combined total of $256,000", "$1,800": "Taxed all $12,000 of super contributions instead of the lesser amount", "$900": "Correct answer", "$36,600": "Applied 15% to the Division 293 income figure"} | {"formula": "min(contributions, (div293_income + contributions) - threshold) * rate", "params": {"div293_income": 244000, "contributions": 12000, "threshold": 250000, "rate": 0.15}, "expected": 900.0} |
Q118 | Rental property | Apportionment of travel expenses (commercial property, mixed business/holiday) | Income tax (rental) | 2024-25 | medium | ["ITAA 1997 s 8-1", "ITAA 1997 s 26-31", "LCR 2018/7"] | https://www.ato.gov.au/forms-and-instructions/rental-properties-2025/rental-expenses | Felix and Marguerite own a residential rental property and a commercial rental property in a Queensland resort town. They travel from Perth mainly for a holiday but also to inspect both properties, spending $1,300 on airfares and $2,200 on accommodation (including meals). They also spent $80 on taxi fares to/from the c... | $380 | $480 | $280 | $3,380 | C | $280 | 280 | AUD | Deductible accommodation = 2,200 x (1 day / 11 days) = 200 → Add the deductible commercial-property taxi fare of 80 → Total deductible travel = 80 + 200 = 280 (airfares and the residential-property taxi are not deductible) | {"$380": "Also claimed the $100 residential-property taxi fare, which is not deductible", "$480": "Counted both the commercial and residential property days (2/10) for the accommodation, but the residential rental travel is not deductible", "$280": "Correct answer", "$3,380": "Claimed the full accommodation plus the no... | {"formula": "commercial_taxi + accommodation * commercial_days / total_days", "params": {"commercial_taxi": 80, "accommodation": 2200, "commercial_days": 1, "total_days": 11}, "expected": 280.0} |
Q119 | Study and training loans | Compulsory repayment – 2025-26 marginal 15c band ($67,001–$125,000) | Study and training support loan – compulsory repayment | 2025-26 | easy | ["Higher Education Support Act 2003 s 154-1", "Higher Education Support Act 2003 s 154-20"] | https://www.ato.gov.au/tax-rates-and-codes/study-and-training-support-loans-rates-and-repayment-thresholds | In the 2025-26 financial year Marcus's repayment income is $92,840. From 2025-26, compulsory repayments use marginal rates: nil up to $67,000, then 15c for each $1 of repayment income over $67,000 (up to $125,000).
What is Marcus's compulsory study and training loan repayment for 2025-26?
A. $25,840
B. $3,876
C. $13,... | $25,840 | $3,876 | $13,926 | $2,584 | B | $3,876 | 3,876 | AUD | Marcus's repayment income $92,840 is above $67,000 but below $125,000, so it stays within the same 15c-in-the-dollar marginal band as the base example → Income above the threshold = 92,840 - 67,000 = 25,840 → Compulsory repayment = 25,840 x 15% = 3,876.00 | {"$25,840": "Reported the income above the threshold without multiplying by the 15% rate", "$3,876": "Correct answer", "$13,926": "Applied the 15% rate to the whole repayment income instead of only the amount over $67,000", "$2,584": "Used the wrong band rate (10% top-band rate) instead of 15%"} | {"formula": "(repayment_income - threshold) * rate", "params": {"repayment_income": 92840, "threshold": 67000, "rate": 0.15}, "expected": 3876.0} |
Q120 | GST | Input tax credit on a purchase – 1/11 of the GST-inclusive cost | GST | 2017-18 | easy | ["GST Act s 11-20", "GST Act s 11-25"] | https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/motor-vehicle-and-transport/motor-vehicle-incentive-payments/examples-working-out-the-gst | Daniel is registered for GST and makes a creditable purchase of a 'Vello model' motor vehicle from Summit Auto in July 2017, for which he pays $45,100 (including GST) and receives a tax invoice. The vehicle is used solely in his business.
What GST credit (input tax credit) can Daniel claim on the vehicle he paid $45,1... | $3,758.33 | $4,510.00 | $372.73 | $4,100.00 | D | $4,100.00 | 4,100 | AUD | Daniel made a creditable purchase and holds a tax invoice → The GST credit equals the GST included in the price = one eleventh of the GST-inclusive amount paid → GST credit = 45,100 / 11 = 4,100 | {"$3,758.33": "Divided the price by the wrong divisor (12) instead of 11", "$4,510.00": "Took 10% of the GST-inclusive price instead of 1/11", "$372.73": "Divided the price by 11 twice", "$4,100.00": "Correct answer"} | {"formula": "amount_paid / 11", "params": {"amount_paid": 45100}, "expected": 4100.0} |
Q121 | Division 7A & Company Tax | Maximum franking credit on a distribution – base rate entity (27.5% tax rate) | Income tax (imputation) | 2019-20 | medium | ["ITAA 1997 s 202-60", "ITAA 1997 s 995-1"] | https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/imputation/paying-dividends-and-other-distributions/allocating-franking-credits | Coastline Composites is a base rate entity for the 2019-20 income year, so its corporate tax rate for imputation purposes is 27.5%. It wants to distribute $250,000 of profit to its shareholders. The maximum franking credit is the frankable distribution multiplied by (1 / applicable gross-up rate), where the gross-up ra... | $107,144.39 | $68,750.00 | $94,826.28 | $659,100.00 | C | $94,826.28 | 94,826.28 | AUD | Corporate tax rate for imputation purposes = 27.5% (base rate entity) → Applicable gross-up rate = (100% - 27.5%) / 27.5% = 2.6364 → Maximum franking credit = 250,000 x (1 / 2.6364) = 94,826.28 | {"$107,144.39": "Used the 30% gross-up rate (2.3333) instead of the base-rate-entity 27.5% rate (2.6364)", "$68,750.00": "Multiplied the distribution by the 27.5% tax rate directly instead of dividing by the gross-up rate", "$94,826.28": "Correct answer", "$659,100.00": "Multiplied by the gross-up rate instead of by it... | {"formula": "distribution * (1 / gross_up_rate)", "params": {"distribution": 250000, "gross_up_rate": 2.6364}, "expected": 94826.28} |
Q122 | CGT | Net capital loss carried forward applied before the discount – shares | Income tax (CGT) | 2012-13 | medium | ["ITAA 1997 s 102-5", "ITAA 1997 s 102-15", "ITAA 1997 s 115-100"] | https://www.ato.gov.au/forms-and-instructions/capital-gains-tax-personal-investors-guide-2013/part-b-sale-of-shares-or-units/b2-worked-examples-for-shares-and-units | Hiroshi bought 600 shares in WBN Ltd for $26,000 in November 1999 and sold them for $41,000 in March. As he bought the shares after 21 September 1999 he cannot use the indexation method, but as he owned them for more than 12 months he can use the discount method. He also has a net capital loss of $3,000 from an earlier... | $6,000 | $12,000 | $4,500 | $7,500 | A | $6,000 | 6,000 | AUD | Total capital gain = 41,000 - 26,000 = 15,000 → Deduct the prior-year net capital loss BEFORE the discount: 15,000 - 3,000 = 12,000 → Apply 50% CGT discount: 12,000 x 0.5 = 6,000 | {"$6,000": "Correct answer", "$12,000": "Deducted the loss but forgot to apply the 50% discount", "$4,500": "Applied the discount before deducting the prior-year loss", "$7,500": "Ignored the carried-forward capital loss"} | {"formula": "(proceeds - cost_base - prior_loss) * discount_rate", "params": {"proceeds": 41000, "cost_base": 26000, "prior_loss": 3000, "discount_rate": 0.5}, "expected": 6000.0} |
Q123 | Superannuation | Division 293 tax (high-income earners) | Superannuation (Division 293 tax) | 2024-25 | medium | ["ITAA 1997 Div 293", "ITAA 1997 s 293-15", "ITAA 1997 s 293-20"] | https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions/division-293-tax-on-concessional-contributions-by-high-income-earners | Petra's Division 293 income is $246,000 and her Division 293 super contributions (low-tax concessional contributions) are $11,000, for a combined total of $257,000. The Division 293 threshold is $250,000 and the Division 293 tax rate is 15%. Division 293 tax applies to the lesser of the super contributions and the amou... | $7,000 | $1,050 | $1,650 | $38,550 | B | $1,050 | 1,050 | AUD | Combined income and contributions = 246,000 + 11,000 = $257,000, above the $250,000 threshold (same side as the base example) → Amount over the $250,000 threshold = 257,000 - 250,000 = $7,000 → Taxable contributions = lesser of contributions ($11,000) and the excess ($7,000) = $7,000 (the excess is the lesser, as in th... | {"$7,000": "Reported the $7,000 excess itself as the tax instead of 15% of it", "$1,050": "Correct answer", "$1,650": "Applied 15% to all $11,000 of contributions, ignoring the lesser-of-the-excess rule", "$38,550": "Applied 15% to the whole combined $257,000, forgetting to subtract the $250,000 threshold"} | {"formula": "rate * min(d293_contributions, (d293_income + d293_contributions) - threshold)", "params": {"d293_income": 246000, "d293_contributions": 11000, "threshold": 250000, "rate": 0.15}, "expected": 1050.0} |
Q124 | FBT | Property fringe benefit – in-house, 75% of lowest retail price plus in-house concession | Fringe benefits tax | 2025-26 | medium | ["FBTAA 1986 s 42", "FBTAA 1986 s 62"] | https://www.ato.gov.au/forms-and-instructions/fringe-benefits-tax-return-2026-instructions/item-23-fringe-benefit-categories-for-fbt-return-2026 | Voltway Electrical, an electrical retailer, provides its employee Dominic Achterberg with a television it sells to the public for $2,400 and an air conditioner it sells to the public for $1,800 during the FBT year ending 31 March 2026. These are the lowest selling prices, including GST. The items are in-house property ... | $2,150 | $1,700 | $2,750 | $2,700 | B | $1,700 | 1,700 | AUD | In-house property fringe benefit (not salary packaged): taxable value = 75% of the lowest public selling price → Gross taxable value = (2,400 + 1,800) x 75% = 3,150 → Reduce by the employee contribution: 3,150 - 450 → Reduce by the in-house benefits concession of up to $1,000 per employee per year: - 1,000 → Taxable va... | {"$2,150": "Forgot to deduct the $450 employee contribution", "$1,700": "Correct answer", "$2,750": "Used the full selling price instead of 75% of it", "$2,700": "Forgot to apply the $1,000 in-house benefits concession"} | {"formula": "(tv_price + aircon_price) * in_house_rate - employee_contribution - concession", "params": {"tv_price": 2400, "aircon_price": 1800, "in_house_rate": 0.75, "employee_contribution": 450, "concession": 1000}, "expected": 1700.0} |
Q125 | FBT | Loan fringe benefit – otherwise deductible rule (rate set without regard to use) | Fringe benefits tax | 2016-17 | hard | ["FBTAA 1986 s 16", "FBTAA 1986 s 18", "FBTAA 1986 s 19"] | https://www.ato.gov.au/law/view/document?DocID=SAV/FBTGEMP/00009&PiT=99991231235958 | On 1 April 2016 Tasman Freight Co gives its employee Garrett Lindqvist an $80,000 loan at 3% for the whole FBT year, with no principal repayments required. The 3% rate is set without regard to how Garrett intends to use the loan. Garrett applies 70% of the loan to interest-bearing investments and spends the remaining 3... | -$1,044 | $1,484 | $2,120 | $636 | D | $636 | 636 | AUD | Step 1 - Taxable value ignoring the otherwise deductible rule = (80,000 x 5.65%) - (80,000 x 3%) = 4,520 - 2,400 = 2,120 → Step 2 - Notional interest if the loan were interest-free = 80,000 x 5.65% = 4,520 → Step 3 - Hypothetical deductible amount = 4,520 x 70% business use = 3,164 → Step 4 - Actual deductible amount o... | {"-$1,044": "Subtracted only the hypothetical deductible amount and forgot to add back the actual deductible amount", "$1,484": "Wrongly applied the 70% business percentage directly to the Step 1 taxable value", "$2,120": "Stopped at Step 1 and ignored the otherwise deductible reduction", "$636": "Correct answer"} | {"formula": "(loan * statutory_rate - loan * actual_rate) - ((loan * statutory_rate) * business_pct - (loan * actual_rate) * business_pct)", "params": {"loan": 80000, "statutory_rate": 0.0565, "actual_rate": 0.03, "business_pct": 0.7}, "expected": 636.0} |
Q126 | FBT | Car fringe benefit – statutory formula method with employee contribution (pre-existing commitment rate) | Fringe benefits tax (car fringe benefits) | 2016-17 | medium | ["FBTAA 1986 s 9", "FBTAA 1986 s 9(2)"] | https://www.ato.gov.au/forms-and-instructions/fringe-benefits-tax-return-2017-completing-your-return/fringe-benefit-categories/a-cars-using-the-statutory-formula | Ironbark Surveying Group has two cars with a reduced base value of $42,000 each. The employer entered into a contract with the employees on 1 March 2011 (a pre-existing commitment in place before 7.30pm AEST on 10 May 2011) to provide the cars for 7 years. Each car travelled 32,000 kilometres in the year ending 31 Marc... | $3,120 | $6,900 | $6,120 | $4,620 | A | $3,120 | 3,120 | AUD | Pre-existing commitment exists, so the transitional statutory percentage applies: 25,000 to 40,000 km travelled = 11% → Car available for the whole FBT year, so no days apportionment is needed → Taxable value = (base value x statutory rate) - employee contribution = (42,000 x 0.11) - 1,500 → = 4,620 - 1,500 = 3,120 | {"$3,120": "Correct answer", "$6,900": "Used the flat 20% rate instead of the 11% pre-existing-commitment transitional rate", "$6,120": "Added the employee contribution instead of subtracting it", "$4,620": "Forgot to subtract the $1,500 employee (fuel) contribution"} | {"formula": "base_value * statutory_rate - employee_contribution", "params": {"base_value": 42000, "statutory_rate": 0.11, "employee_contribution": 1500}, "expected": 3120.0} |
Q127 | Depreciation | Decline in value denied – asset used 100% privately (no taxable use) | Income tax (capital allowances, Div 40) | 2024-25 | medium | ["ITAA 1997 s 40-25", "ITAA 1997 s 40-25(2)"] | https://www.ato.gov.au/individuals-and-families/investments-and-assets/property-and-land/residential-rental-properties/rental-expenses/depreciating-assets-in-rental-properties | Grace owns a holiday house that she uses entirely for her own private holidays. It is never rented out and is never genuinely available for rent. During 2024-25 she buys a new $4,000 dishwasher and installs it in the holiday house. Although the decline in value of a depreciating asset starts when it is first used or in... | $0 | $4,000 | $800 | $400 | A | $0 | 0 | AUD | The dishwasher is used 0% for a taxable purpose (100% private holiday use) → Decline in value must be reduced for private use; with 0% taxable use the deductible amount is nil → Full-year diminishing value would be 4,000 x (2.0/10) = 800, but x 0% taxable use = 0 → Deduction = 0 | {"$0": "Correct answer", "$4,000": "Claimed the whole $4,000 cost as an immediate deduction (asset is over $300 and wholly private)", "$800": "Trap: claimed the full diminishing value deduction (800) ignoring that the asset is used 100% privately", "$400": "Claimed a prime-cost deduction (400) ignoring the 100% private... | {"formula": "cost * (dv_factor / effective_life) * taxable_pct", "params": {"cost": 4000, "taxable_pct": 0.0, "effective_life": 10, "dv_factor": 2.0}, "expected": 0.0} |
Q128 | Depreciation | Instant asset write-off – full cost equals the limit exactly (does not qualify) | Income tax (simplified depreciation, Div 328) | 2024-25 | hard | ["ITAA 1997 s 328-180", "IT(TP)A 1997 s 328-180", "ITAA 1997 s 328-185"] | https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/instant-asset-write-off | Marco is a sole trader (aggregated turnover under $10 million) using the simplified depreciation rules. On 10 October 2024 he buys a packaging machine for exactly $20,000 (GST-exclusive) and uses it 100% for his business. The instant asset write-off limit for 2024-25 is $20,000, and to qualify an asset's full cost must... | $20,000 | $1,500 | $6,000 | $3,000 | D | $3,000 | 3,000 | AUD | The instant asset write-off requires the asset's full cost to be LESS THAN $20,000 → The cost is exactly $20,000, which is not below the limit, so the immediate write-off is NOT available → The asset is allocated to the small business pool and deducted at 15% in the first year: 20,000 x 15% = 3,000 | {"$20,000": "Trap: claimed the full $20,000 under the instant asset write-off, but at exactly the limit the cost is not 'less than' the limit so it does not qualify", "$1,500": "Halved the first-year pool deduction again", "$6,000": "Used the 30% ongoing pool rate instead of the 15% first-year (half-rate) pool rate", "... | {"formula": "cost * first_year_pool_rate", "params": {"cost": 20000, "limit": 20000, "first_year_pool_rate": 0.15, "ongoing_pool_rate": 0.3}, "expected": 3000.0} |
Q129 | Study and training loans | Compulsory repayment – 2025-26 band $125,001–$179,285 ($8,700 + 17c) | Study and training support loan – compulsory repayment | 2025-26 | medium | ["Higher Education Support Act 2003 s 154-1", "Higher Education Support Act 2003 s 154-20"] | https://www.ato.gov.au/tax-rates-and-codes/study-and-training-support-loans-rates-and-repayment-thresholds | In the 2025-26 financial year Declan has a taxable income of $134,200 and reportable super contributions of $16,320, giving a repayment income of $150,520. For 2025-26 the band from $125,001 to $179,285 is $8,700 plus 17c for each $1 of repayment income over $125,000.
What is Declan's compulsory study and training loa... | $15,052.00 | $4,338.40 | $13,038.40 | $34,288.40 | C | $13,038.40 | 13,038.4 | AUD | Repayment income = 134,200 + 16,320 = 150,520, which stays within the same $125,001-$179,285 band as the base example → Income above $125,000 = 150,520 - 125,000 = 25,520 → 17c component = 25,520 x 17% = 4,338.40 → Compulsory repayment = 8,700 + 4,338.40 = 13,038.40 | {"$15,052.00": "Applied the 10% top-band rate to the whole repayment income", "$4,338.40": "Forgot to add the $8,700 base amount for the band", "$13,038.40": "Correct answer", "$34,288.40": "Applied 17% to the whole repayment income before adding the base, instead of only to the excess over $125,000"} | {"formula": "base + (repayment_income - threshold) * rate", "params": {"repayment_income": 150520, "threshold": 125000, "base": 8700, "rate": 0.17}, "expected": 13038.4} |
Q130 | Individual income tax | Combined LITO + LMITO offset reducing tax payable | Income tax offset | 2021-22 | medium | ["ITAA 1936 s 159N", "ITAA 1997 s 61-570", "ITAA 1997 s 61-575"] | https://www.ato.gov.au/forms-and-instructions/low-and-middle-income-earner-tax-offsets | Selina's taxable income is $43,000 for 2021-22 and she is eligible for both offsets. The ATO works out her low income tax offset as $700 minus 5c per $1 above $37,500, and her low and middle income tax offset as $675 plus 7.5c per $1 above $37,000, then adds them together to reduce her tax payable.
What is the total t... | $1,550 | $1,125 | $1,100 | $425 | A | $1,550 | 1,550 | AUD | Kept taxable income within the overlapping 2021-22 LITO 5c taper band and LMITO 7.5c phase-in band ($37,501-$45,000) → LITO = 700 - (43,000 - 37,500) x 0.05 = 700 - 275 = 425 → LMITO = 675 + (43,000 - 37,000) x 0.075 = 675 + 450 = 1,125 → Total offset = 425 + 1,125 = 1,550 | {"$1,550": "Correct answer", "$1,125": "Counted only the LMITO and omitted the LITO", "$1,100": "Used the LMITO base of $675 without adding the 7.5c-per-dollar phase-in amount", "$425": "Counted only the LITO and omitted the LMITO"} | {"formula": "(lito_max - (taxable_income - lito_taper_start) * lito_taper_rate) + (lmito_base + (taxable_income - lmito_phase_start) * lmito_phase_rate)", "params": {"taxable_income": 43000, "lito_max": 700, "lito_taper_start": 37500, "lito_taper_rate": 0.05, "lmito_base": 675, "lmito_phase_start": 37000, "lmito_phase_... |
Q131 | Individual income tax | Foreign resident – no tax-free threshold and no Medicare levy | Income tax (individual) | 2024-25 | medium | ["Income Tax Rates Act 1986 s 12", "Income Tax Rates Act 1986 Sch 7 Pt II", "Medicare Levy Act 1986 s 7"] | https://www.ato.gov.au/tax-rates-and-codes/tax-rates-foreign-residents | Diego is a foreign resident for tax purposes for the whole 2024-25 income year and has Australian-sourced taxable income of $105,000. He is NOT entitled to the tax-free threshold and, as a foreign resident, is NOT required to pay the Medicare levy. For 2024-25 the foreign resident rates are 32.5c for each $1 from the f... | $34,125 | $28,210 | $24,592 | $36,225 | A | $34,125 | 34,125 | AUD | Foreign residents get NO tax-free threshold: the first dollar is taxed. → 2024-25 foreign resident first bracket: 32.5c for each $1 from 0 to $120,000. → Income tax = 105,000 x 0.325 = 34,125. → Foreign residents are not required to pay the Medicare levy, so nothing is added. | {"$34,125": "Correct answer", "$28,210": "Applied the $18,200 tax-free threshold before the foreign resident rate (foreign residents don't get it)", "$24,592": "Used the resident schedule ($5,092 base + 32.5c over $45,000), wrongly giving the foreign resident the tax-free threshold/base step", "$36,225": "Added a 2% Me... | {"formula": "taxable_income * foreign_rate", "params": {"taxable_income": 105000, "foreign_rate": 0.325, "tax_free_threshold": 18200, "resident_base": 5092, "resident_threshold": 45000, "resident_rate": 0.325, "medicare_rate": 0.02}, "expected": 34125.0} |
Q132 | Employment | PAYG instalments – varying the instalment amount (3rd quarter, 75% cumulative) | Income tax (PAYG instalments) | 2024-25 | medium | ["TAA 1953 Sch 1 s 45-110", "TAA 1953 Sch 1 s 45-205"] | https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/payg-instalments/how-to-vary-your-payg-instalments | Devon receives income from his investments. His quarterly PAYG instalment amount is $8,000, which he paid in the first quarter (1 July to 30 September) and second quarter (1 October to 31 December). In January he sells some investments and varies his instalment amount on his third-quarter activity statement. Using the ... | -$4,000 | $2,000 | $8,000 | $18,000 | B | $2,000 | 2,000 | AUD | Estimated tax for the year = $24,000 → Cumulative amount required by the third quarter = 75% × $24,000 = $18,000 → Less amounts already paid in Q1 and Q2: $18,000 − ($8,000 + $8,000) = $2,000 | {"-$4,000": "Applied the second-quarter 50% proportion instead of the third-quarter 75%", "$2,000": "Correct answer", "$8,000": "Used 100% of the estimated tax instead of the 75% cumulative third-quarter proportion", "$18,000": "Forgot to subtract the first and second quarter instalments already paid"} | {"formula": "est_tax*q3_pct - (q1 + q2)", "params": {"est_tax": 24000, "q3_pct": 0.75, "q1": 8000, "q2": 8000}, "expected": 2000.0} |
Q133 | Income tests | Rebate income – SAPTO shading-out (single) | Income tax – seniors and pensioners tax offset | 2024-25 | medium | ["ITAA 1936 s 160AAAA", "Income Tax Assessment (1936 Act) Regulation 2015"] | https://www.ato.gov.au/individuals-and-families/income-deductions-offsets-and-records/tax-offsets/seniors-and-pensioners-tax-offset | Dimitri is single and receives an age pension from Centrelink. His rebate income is $42,000. The single SAPTO maximum is $2,230, the shading-out threshold is $34,919 and the cut-out threshold is $52,759. Because his rebate income is below the cut-out threshold he is eligible, but as it exceeds the shading-out threshold... | $1,344.88 | $2,230.00 | -$3,020.00 | $885.12 | A | $1,344.88 | 1,344.88 | AUD | Dimitri's rebate income $42,000 is above the $34,919 shading-out threshold but below the $52,759 cut-out, so it stays within the same shade-out segment as the base example → Rebate income above the shading-out threshold = 42,000 - 34,919 = 7,081 → Reduction = 7,081 x 0.125 = 885.125 → SAPTO = 2,230 - 885.125 = 1,344.87... | {"$1,344.88": "Correct answer", "$2,230.00": "Ignored the shading-out reduction and claimed the full maximum $2,230", "-$3,020.00": "Reduced by 12.5% of total rebate income instead of only the amount over the shading-out threshold", "$885.12": "Reported the reduction amount instead of the remaining offset"} | {"formula": "max_offset - (rebate_income - shade_threshold) * reduction_rate", "params": {"rebate_income": 42000, "max_offset": 2230, "shade_threshold": 34919, "reduction_rate": 0.125}, "expected": 1344.88} |
Q134 | Rental property | Borrowing expenses deductible over 5 years (first-year days apportionment, partly private) | Income tax (rental) | 2024-25 | hard | ["ITAA 1997 s 25-25"] | https://www.ato.gov.au/forms-and-instructions/rental-properties-2025/rental-expenses | Imogen and Rupert (joint tenants, 50% each) secure a 25-year loan of $264,000 to buy a rental property for $220,000 and a private car for $44,000. Their borrowing expenses (establishment fees, valuation fees and stamp duty on the mortgage) total $2,150. As this exceeds $100, the deduction is spread over 5 years (1,826 ... | $390.91 | $325.76 | $358.33 | $1,791.67 | B | $325.76 | 325.76 | AUD | Spread over 5 years (1,826 days) and apportion for the 332 days in the first year: 2,150 x (332 / 1,826) = 390.91 → Apportion for the rental-property portion of the loan: 390.91 x (220,000 / 264,000) → = 325.76 | {"$390.91": "Forgot to exclude the private car portion of the loan ($39,000)", "$325.76": "Correct answer", "$358.33": "Used a flat one-fifth of the expenses instead of apportioning the first year by days", "$1,791.67": "Claimed the whole rental-portion of borrowing expenses in year 1 instead of spreading over 5 years"... | {"formula": "borrowing_expenses * (days_first_year / days_5yr) * (rental_loan / total_loan)", "params": {"borrowing_expenses": 2150, "days_first_year": 332, "days_5yr": 1826, "rental_loan": 220000, "total_loan": 264000}, "expected": 325.76} |
Q135 | GST | Decreasing GST adjustment on sale of a partly-private capital asset | GST | 2016-17 | hard | ["GST Act Div 132", "GST Act s 132-5"] | https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/rules-for-specific-transactions/business-asset-transactions/gst-and-the-disposal-of-capital-assets | Hugo runs an electrical business and is registered for GST. He bought a vehicle for $55,000 (including $5,000 GST) and used it 70% for business and 30% privately, so he claimed a GST credit of $3,500 (70% of the $5,000 GST). He made no other adjustments. Hugo later sells the vehicle for $27,500 (including $2,500 GST) a... | $750 | $1,750 | $1,500 | $2,500 | A | $750 | 750 | AUD | Decreasing adjustment = 1/11 x price x (1 - adjusted GST credit / full GST credit) → = (1/11) x 27,500 x (1 - 3,500/5,000) → = 2,500 x (1 - 0.7) = 2,500 x 0.3 = 750 | {"$750": "Correct answer", "$1,750": "Multiplied by the 70% credit ratio instead of the 30% private-use factor (1 - ratio)", "$1,500": "Took the difference between full and claimed credits ($1,500) instead of using the decreasing-adjustment formula", "$2,500": "Used the full 1/11 of the sale price without the (1 - cred... | {"formula": "(1 / 11) * sale_price * (1 - adjusted_gst_credit / full_gst_credit)", "params": {"sale_price": 27500, "adjusted_gst_credit": 3500, "full_gst_credit": 5000}, "expected": 750.0} |
Q136 | Superannuation | Excess concessional contributions added to assessable income (not silently capped) | Income tax (individual) | 2024-25 | hard | ["ITAA 1997 s 291-15", "ITAA 1997 s 291-20", "ITAA 1997 Subdiv 291-B"] | https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions/concessional-contributions-cap | Nadia has total concessional contributions of $38,000 for 2024-25 (employer SG plus salary sacrifice plus a deductible personal contribution). The concessional contributions cap from 1 July 2024 is $30,000 and she has no unused carry-forward cap. The excess concessional contributions (ECC) of $8,000 are included in her... | $8,360 | $2,960 | $1,760 | $0 | C | $1,760 | 1,760 | AUD | Concessional cap from 1 July 2024 = $30,000. → Excess concessional contributions (ECC) = 38,000 - 30,000 = 8,000 (added to assessable income, NOT silently capped). → ECC taxed at marginal rate less a 15% offset: effective extra rate = 37% - 15% = 22%. → Extra tax = 8,000 x 0.22 = 1,760. | {"$8,360": "Applied the (marginal - 15%) rate to the whole $38,000 contribution instead of only the $8,000 excess", "$2,960": "Taxed the $8,000 excess at the full 37% marginal rate but forgot the 15% non-refundable offset", "$1,760": "Correct answer", "$0": "Assumed the contribution was simply capped at $30,000, so no ... | {"formula": "(total_cc - cap) * (marginal_rate - offset_rate)", "params": {"total_cc": 38000, "cap": 30000, "marginal_rate": 0.37, "offset_rate": 0.15}, "expected": 1760.0} |
Q137 | Individual income tax | Medicare levy surcharge – income $1 over the Tier 1 floor (whole-income, not excess) | Medicare levy surcharge | 2024-25 | medium | ["A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999 s 12", "Medicare Levy Act 1986 s 8B"] | https://www.ato.gov.au/individuals-and-families/medicare-and-private-health-insurance/medicare-levy-surcharge/medicare-levy-surcharge-income-thresholds-and-rates | Owen is single with no dependants and has no private patient hospital cover for the whole of 2024-25. His income for MLS purposes is exactly $97,001 - just $1 over the 2024-25 single base-tier ceiling of $97,000 - which places him in Tier 1. The Tier 1 rate is 1% and the surcharge is levied on his WHOLE income for MLS ... | $0.00 | $0.01 | $1,212.51 | $970.01 | D | $970.01 | 970.01 | AUD | 2024-25 single base tier is $97,000 or less; $97,001 is $1 over, so Owen is in Tier 1 (1%). → The surcharge applies to the WHOLE income for MLS purposes, not the amount over the threshold. → MLS = 97,001 x 0.01 = 970.01. | {"$0.00": "Treated $97,001 as still within the base tier (off-by-one) and charged no surcharge", "$0.01": "Charged the 1% surcharge only on the $1 above the threshold instead of the whole income", "$1,212.51": "Used the Tier 2 rate of 1.25% instead of the Tier 1 rate of 1%", "$970.01": "Correct answer"} | {"formula": "income_for_mls * tier1_rate", "params": {"income_for_mls": 97001, "tier1_rate": 0.01, "threshold": 97000, "tier2_rate": 0.0125}, "expected": 970.01} |
Q138 | Depreciation | Diminishing value method – second year (reduced base value) | Income tax (capital allowances, Div 40) | 2025-26 | medium | ["ITAA 1997 s 40-25", "ITAA 1997 s 40-70"] | https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/general-depreciation-rules-capital-allowances/prime-cost-straight-line-and-diminishing-value-methods | Continuing the diminishing value example, a survey instrument that cost $50,000 with a 4-year effective life declined by $25,000 in its first year. The base value reduces each year by the prior decline in value, so the base value for the second year is $50,000 minus $25,000 = $25,000. The asset is held for the full 365... | $6,250 | $9,375 | $12,500 | $25,000 | C | $12,500 | 12,500 | AUD | Base value for year 2 = 50,000 - 25,000 (year 1 decline) = 25,000 → Diminishing value rate = 200% / 4 years = 50% → Decline in value = 25,000 x (365 / 365) x 50% = 12,500 | {"$6,250": "Applied the prime cost 100% rate to the base value instead of the 200% rate", "$9,375": "Used the old 150% diminishing value rate", "$12,500": "Correct answer", "$25,000": "Used the original $50,000 cost instead of the reduced $25,000 base value"} | {"formula": "base_value * (days_held / days_year) * (dv_factor / effective_life)", "params": {"base_value": 25000, "cost": 50000, "days_held": 365, "days_year": 365, "effective_life": 4, "dv_factor": 2.0, "pc_factor": 1.0}, "expected": 12500.0} |
Q139 | Division 7A & Company Tax | Interest accrued on a Division 7A amalgamated loan (daily-balance method) | Income tax (Division 7A) | 2014-15 | hard | ["ITAA 1936 s 109E"] | https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/private-company-benefits-division-7a-dividends/in-detail/division-7a-loans | A Division 7A amalgamated loan has an opening principal of $90,000 at 1 July 2014. A $24,000 repayment on 1 October 2014 reduced the balance to $66,000, and a $12,000 repayment on 1 June 2015 reduced it to $54,000. Interest for the 2014-15 year is calculated annually in arrears on the daily balance at the 2015 benchmar... | $4,228 | $4,165 | $3,213 | $5,355 | A | $4,228 | 4,228 | AUD | Interest on $90,000 for 92 days: 5.95% x 90,000 x 92/365 = 1,349.59 → Interest on $66,000 for 243 days: 5.95% x 66,000 x 243/365 = 2,614.78 → Interest on $54,000 for 30 days: 5.95% x 54,000 x 30/365 = 264.05 → Total interest = 1,349.59 + 2,614.78 + 264.05 = 4,228 (rounded to nearest dollar) | {"$4,228": "Correct answer", "$4,165": "Used a simple average of the three balances rather than weighting each by the number of days it was outstanding", "$3,213": "Applied the rate to the closing balance only for the whole year", "$5,355": "Applied the benchmark rate to the full opening balance for the whole year, ign... | {"formula": "round(rate*bal1*(days1/365) + rate*bal2*(days2/365) + rate*bal3*(days3/365))", "params": {"bal1": 90000, "days1": 92, "bal2": 66000, "days2": 243, "bal3": 54000, "days3": 30, "rate": 0.0595}, "expected": 4228.0} |
Q140 | Rental property | Renting out part of a property (floor-area apportionment x time) | Income tax (rental) | 2024-25 | medium | ["ITAA 1997 s 8-1", "IT 2167"] | https://www.ato.gov.au/forms-and-instructions/rental-properties-2025/rental-expenses | Lawrence's private residence includes a self-contained flat whose floor area is one-third of the residence. He rents out the flat for 9 months (39 weeks) of the year at $160 per week; for the rest of the year his nephew lives there rent free. The annual mortgage interest, building insurance, rates and taxes for the who... | $2,865 | -$3,885 | -$7,260 | $1,740 | A | $2,865 | 2,865 | AUD | Rent = 39 weeks x $160 = 6,240 → Expenses for the flat = 13,500 x one-third x 75% = 3,375 → Net rental income = 6,240 - 3,375 = 2,865 | {"$2,865": "Correct answer", "-$3,885": "Apportioned by time only and forgot the one-third floor-area apportionment", "-$7,260": "Deducted all $9,000 of whole-property expenses against the flat's rent", "$1,740": "Apportioned by floor area only and forgot the 50% time apportionment (flat rented half the year)"} | {"formula": "weeks_rented * rent_per_week - total_expenses * floor_fraction * time_fraction", "params": {"weeks_rented": 39, "rent_per_week": 160, "total_expenses": 13500, "floor_fraction": 0.3333333333333333, "time_fraction": 0.75}, "expected": 2865.0} |
Q141 | Imputation | Franked dividend gross-up and top-up tax (individual) | Income tax (imputation) | 2024-25 | hard | ["ITAA 1997 s 207-20", "ITAA 1997 s 207-35", "ITAA 1997 s 67-25"] | https://www.ato.gov.au/businesses-and-organisations/corporate-tax-measures-and-assurance/imputation/receiving-dividends-and-other-distributions | Tobias, an Australian resident individual on a 47% marginal rate (including Medicare levy), receives a franked distribution of $700 directly from a company with $300 of franking credits attached. He uses the gross-up and credit approach: he includes the grossed-up amount in assessable income and is entitled to a tax of... | $329 | $29 | $470 | $170 | D | $170 | 170 | AUD | Grossed-up assessable income = $700 dividend + $300 franking credit = $1,000 → Tax on grossed-up income at 47% = $1,000 x 0.47 = $470 → Less franking credit tax offset = $300 → Top-up tax payable = $470 - $300 = $170 | {"$329": "Applied the marginal rate to the cash dividend only, ignoring both the gross-up and the offset", "$29": "Taxed only the cash dividend (not grossed up) before deducting the franking credit, producing a negative/under-stated result", "$470": "Grossed up correctly but forgot to subtract the franking credit tax o... | {"formula": "(dividend + franking_credit) * marginal_rate - franking_credit", "params": {"dividend": 700, "franking_credit": 300, "marginal_rate": 0.47}, "expected": 170.0} |
Q142 | FBT | Car parking fringe benefit – daily rate from a periodic (monthly) fee | Fringe benefits tax | 2024-25 | medium | ["FBTAA 1986 s 39A", "FBTAA 1986 s 39C"] | https://www.ato.gov.au/law/view/document?DocID=SAV/FBTGEMP/00017&PiT=99991231235958 | Park-Pro is a commercial parking station whose all-day parking fees are lower the greater the financial commitment. A customer pays $357 to park their car for a month that contains 21 business days, with the facility open 24 hours a day. Under the commercial parking station method, the lowest daily rate for all-day par... | $11.90 | $32.08 | $17.00 | $357.00 | C | $17.00 | 17 | AUD | Where all-day parking fees are paid periodically, the equivalent daily rate = total fee / business days in the period → Daily rate = 357 / 21 = 17.00 (rounded to the nearest cent) → This $17.00 is the lowest all-day parking rate and is the taxable value of one car parking fringe benefit under the commercial parking sta... | {"$11.90": "Divided the monthly fee by 30 calendar days instead of the 21 business days", "$32.08": "Grossed up the daily taxable value by the Type 2 factor before reporting it", "$17.00": "Correct answer", "$357.00": "Used the whole monthly fee as the daily rate"} | {"formula": "monthly_fee / business_days", "params": {"monthly_fee": 357, "business_days": 21}, "expected": 17.0} |
Q143 | FBT | Loan fringe benefit – interest-free loan at benchmark interest rate | Fringe benefits tax | 2025-26 | easy | ["FBTAA 1986 s 16", "FBTAA 1986 s 18"] | https://www.ato.gov.au/forms-and-instructions/fringe-benefits-tax-return-2026-instructions/item-23-fringe-benefit-categories-for-fbt-return-2026 | Clearview Hardware, a retail business, lends its employee Sienna Okafor $35,000. It does not charge any interest, and Sienna makes no repayments during the FBT year ending 31 March 2026. The statutory (benchmark) interest rate that applies from 1 April 2025 is 8.62%.
What is the taxable value of the loan fringe benefi... | $1,417.99 | $5,692.48 | $3,017.00 | $35,000.00 | C | $3,017.00 | 3,017 | AUD | Taxable value of a loan fringe benefit = interest at the statutory (benchmark) rate minus interest actually charged → Benchmark interest rate for the FBT year ending 31 March 2026 = 8.62% → Notional interest = 35,000 x 8.62% = 3,017 → Actual interest charged = 35,000 x 0% = 0 → Taxable value = 3,017 - 0 = 3,017 (grosse... | {"$1,417.99": "Applied the 47% FBT rate to the notional interest instead of reporting the taxable value", "$5,692.48": "Grossed up the taxable value by the Type 2 factor instead of reporting the pre-gross-up taxable value", "$3,017.00": "Correct answer", "$35,000.00": "Treated the whole loan principal as the taxable va... | {"formula": "loan * benchmark_rate - loan * actual_rate", "params": {"loan": 35000, "benchmark_rate": 0.0862, "actual_rate": 0.0}, "expected": 3017.0} |
Q144 | Employment | Work-related car – logbook business-use percentage from kilometres | Income tax (work-related deduction) | 2024-25 | easy | ["ITAA 1997 s 28-90", "ITAA 1997 s 28-100"] | https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/income-and-deductions-for-business/deductions/deductions-for-motor-vehicle-expenses/logbook-method | Owen keeps a logbook to work out the business-use percentage of his car. Over the logbook period his car travelled a total of 13,000 kilometres, of which 9,750 kilometres were for business-related purposes.
What is Owen's business-use percentage for the logbook method?
A. $0.75
B. $75.00
C. $25.00
D. $133.33 | $0.75 | $75.00 | $25.00 | $133.33 | B | $75.00 | 75 | percent | Business-use percentage = (business kilometres ÷ total kilometres) × 100 → = 9,750 ÷ 13,000 × 100 → = 0.75 × 100 = 75% | {"$0.75": "Forgot to multiply the fraction by 100 to express it as a percentage", "$75.00": "Correct answer", "$25.00": "Used the private (non-business) kilometres in the numerator instead of business kilometres", "$133.33": "Divided total kilometres by business kilometres (ratio inverted)"} | {"formula": "business_km/total_km*100", "params": {"business_km": 9750, "total_km": 13000}, "expected": 75.0} |
Q145 | GST | GST on a taxable sale – 1/11 of the GST-inclusive price | GST | 2017-18 | easy | ["GST Act s 9-70", "GST Act s 9-75"] | https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/gst/in-detail/your-industry/motor-vehicle-and-transport/motor-vehicle-incentive-payments/examples-working-out-the-gst | In July 2017 Summit Auto, a GST-registered car dealer, sold a 'Vello model' motor vehicle. Daniel paid $45,100 (including GST) for the vehicle, and the manufacturer paid Summit Auto a $3,300 (including GST) run-out incentive that forms part of the consideration, so the total price for the sale of the motor vehicle is $... | $4,100 | $4,840 | $4,400 | $400 | C | $4,400 | 4,400 | AUD | Total price for the sale = $45,100 paid by Daniel + $3,300 incentive from the manufacturer = 48,400 → GST on a fully taxable sale = one eleventh of the GST-inclusive price → GST = 48,400 / 11 = 4,400 | {"$4,100": "Used only the $45,100 the buyer paid, omitting the $3,300 incentive that is part of the consideration", "$4,840": "Took 10% of the GST-inclusive price instead of 1/11", "$4,400": "Correct answer", "$400": "Divided the price by 11 twice"} | {"formula": "total_sale_price / 11", "params": {"total_sale_price": 48400, "amount_paid_by_buyer": 45100}, "expected": 4400.0} |
Q146 | Study and training loans | Repayment income (taxable income + RFBA) driving a 2024-25 HELP repayment | Study and training support loan – compulsory repayment | 2024-25 | medium | ["Higher Education Support Act 2003 s 154-1", "FBTAA 1986 s 135P"] | https://www.ato.gov.au/individuals-and-families/jobs-and-employment-types/working-as-an-employee/reportable-fringe-benefits-for-employees/consequences-of-having-a-reportable-fringe-benefits-amount | Bianca has a HELP debt of $12,000. Her taxable income for 2024-25 is $61,500. Based on taxable income alone her repayment would be lower. However, she also receives reportable fringe benefits with a reportable fringe benefit amount (RFBA) of $16,200, which is added to her taxable income to give her repayment income. Fo... | $615.00 | $2,719.50 | $2,152.50 | $3,108.00 | B | $2,719.50 | 2,719.5 | AUD | Repayment income = taxable income + RFBA = 61,500 + 16,200 = 77,700 → A 2024-25 repayment income of $77,700 falls in the same 3.5% band ($74,856-$79,346) as the base example → For 2024-25 the rate applies to the whole repayment income: 77,700 x 3.5% = 2,719.50 | {"$615.00": "Ignored the RFBA and used taxable income at its 1.0% band", "$2,719.50": "Correct answer", "$2,152.50": "Applied the correct 3.5% rate but to taxable income only, omitting the RFBA", "$3,108.00": "Used the next band's 4.0% rate instead of 3.5%"} | {"formula": "(taxable_income + rfba) * rate", "params": {"taxable_income": 61500, "rfba": 16200, "rate": 0.035, "taxable_only_rate": 0.01}, "expected": 2719.5} |
Q147 | Individual income tax | Income below the tax-free threshold and below the Medicare low-income threshold | Income tax (individual) | 2024-25 | medium | ["Income Tax Rates Act 1986 Sch 7", "Medicare Levy Act 1986 s 7", "ITAA 1997 s 4-10"] | https://www.ato.gov.au/individuals-and-families/medicare-and-private-health-insurance/medicare-levy/medicare-levy-reduction/medicare-levy-reduction-for-low-income-earners | Tomas is an Australian resident for all of 2024-25 with a taxable income of $16,000, single with no dependants. This is below the $18,200 tax-free threshold, so his basic income tax is nil. It is also at or below the 2024-25 single Medicare levy lower threshold of $27,222, so he pays no Medicare levy. (The first Stage ... | $2,880 | $0 | -$352 | $320 | B | $0 | 0 | AUD | Taxable income $16,000 is below the $18,200 tax-free threshold, so income tax = 0. → $16,000 is below the 2024-25 single Medicare lower threshold ($27,222), so Medicare levy = 0. → Total tax = 0 + 0 = 0. | {"$2,880": "Taxed the whole $16,000 at 16% and charged a 2% levy, ignoring both the tax-free threshold and the low-income exemption", "$0": "Correct answer", "-$352": "Applied 16c to (income minus tax-free threshold), producing a negative figure instead of clamping tax at $0", "$320": "Charged the 2% Medicare levy desp... | {"formula": "max(0, taxable_income - tax_free_threshold) * first_rate + max(0, taxable_income - medicare_low_threshold) * medicare_rate", "params": {"taxable_income": 16000, "tax_free_threshold": 18200, "first_rate": 0.16, "medicare_rate": 0.02, "medicare_low_threshold": 27222}, "expected": 0.0} |
Q148 | CGT | Applying a capital loss before the CGT discount (multiple assets) | Income tax (CGT) | 2024-25 | medium | ["ITAA 1997 s 102-5", "ITAA 1997 s 110-55", "ITAA 1997 s 115-100"] | https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/calculating-your-cgt/how-to-calculate-your-cgt | In the same financial year, Daniel makes a $120,000 capital gain on an investment property he owned for 6 years. He also sells 2,000 shares he bought for $24,000 (including stamp duty and brokerage) for $16,800, making a capital loss of $7,200. He has no other capital gains or losses and no prior-year losses.
What is ... | $52,800 | $60,000 | $63,600 | $56,400 | D | $56,400 | 56,400 | AUD | Capital gain on property = 120,000 → Capital loss on shares = 7,200 (reduced cost base 24,000 - proceeds 16,800) → Offset the capital loss against the gain BEFORE the discount: 120,000 - 7,200 = 112,800 → Apply 50% CGT discount to the remaining gain: 112,800 x 0.5 = 56,400 | {"$52,800": "Applied the discount before deducting the capital loss", "$60,000": "Ignored the share capital loss entirely", "$63,600": "Added the loss to the gain instead of subtracting it", "$56,400": "Correct answer"} | {"formula": "(property_gain - share_loss) * discount_rate", "params": {"property_gain": 120000, "share_loss": 7200, "discount_rate": 0.5}, "expected": 56400.0} |
Q149 | CGT | Indexation method – shares acquired before 21 Sep 1999 | Income tax (CGT) | 2012-13 | medium | ["ITAA 1997 s 104-10", "ITAA 1997 s 114-1", "ITAA 1997 s 960-275"] | https://www.ato.gov.au/forms-and-instructions/capital-gains-tax-personal-investors-guide-2013/part-b-sale-of-shares-or-units/b2-worked-examples-for-shares-and-units | In October 1986 Beatriz was given 800 shares in QHL Ltd with a market value of $4,000. She sold the shares last April for $7,800. As she acquired the shares before 21 September 1999 and owned them for more than 12 months, she can use the indexation method. The indexation factor is CPI Sep 1999 quarter (123.4) / CPI Dec... | $808 | $1,616 | $1,900 | $3,800 | B | $1,616 | 1,616 | AUD | Indexation factor = 123.4 / 79.8 = 1.546 → Indexed cost base = 4,000 x 1.546 = 6,184 → Capital gain (indexation method) = 7,800 - 6,184 = 1,616 → Under the indexation method the CGT discount does not apply | {"$808": "Wrongly applied the 50% discount on top of the indexation method", "$1,616": "Correct answer", "$1,900": "Used the discount method on the unindexed gain instead of indexation", "$3,800": "Used the unindexed cost base instead of indexing it"} | {"formula": "proceeds - cost * indexation_factor", "params": {"proceeds": 7800, "cost": 4000, "indexation_factor": 1.546, "discount_rate": 0.5}, "expected": 1616.0} |
Q150 | FBT | Housing fringe benefit – market rental less recipient rent | Fringe benefits tax | 2025-26 | easy | ["FBTAA 1986 s 25", "FBTAA 1986 s 26"] | https://www.ato.gov.au/forms-and-instructions/fringe-benefits-tax-return-2026-instructions/item-23-fringe-benefit-categories-for-fbt-return-2026 | Alpine Confectionery Pty Ltd, a chocolate manufacturer, provides a flat in the Melbourne CBD to its employee Maeve Donovan for the FBT year ending 31 March 2026. The flat is Maeve's usual place of residence for the whole year. The market rental value for the year is $49,400 (52 weeks at $950). Maeve pays a nominal rent... | $41,600 | $49,400 | -$44,200 | $31,200 | A | $41,600 | 41,600 | AUD | Taxable value of a housing fringe benefit = market rental value of the right to occupy minus any recipient's (employee) rent → Market rental value for the year = 49,400 (52 weeks x $950) → Recipient rent paid by the employee = 7,800 (52 weeks x $150) → Taxable value = 49,400 - 7,800 = 41,600 | {"$41,600": "Correct answer", "$49,400": "Ignored the recipient rent paid by the employee", "-$44,200": "Treated the $7,800 annual rent as a monthly figure and multiplied it by 12", "$31,200": "Wrongly applied a 75% reduction (which applies to certain hotel/caravan staff housing, not a CBD flat)"} | {"formula": "market_rental - recipient_rent", "params": {"market_rental": 49400, "recipient_rent": 7800}, "expected": 41600.0} |
Q151 | CGT | CGT discount denied – foreign resident for whole ownership period (post 8 May 2012) | Income tax (CGT) | 2024-25 | hard | ["ITAA 1997 s 115-105", "ITAA 1997 s 115-115", "ITAA 1997 s 115-25"] | https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/foreign-residents-and-capital-gains-tax/cgt-discount-for-foreign-residents | Diego is a foreign resident for Australian tax purposes for the entire period he owns a taxable Australian real property. He acquired the property on 1 March 2015 (after 8 May 2012) and sold it on 1 September 2024, owning it for over 9 years – well beyond 12 months. He makes a capital gain of $300,000 on the sale and h... | $150,000 | $300,000 | $225,000 | $75,000 | B | $300,000 | 300,000 | AUD | The asset was acquired after 8 May 2012 and Diego was a foreign resident for the entirety of his ownership period → In that case he is not entitled to ANY CGT discount, despite owning the asset for more than 12 months → There is no period of Australian residency, so no apportioned discount is available either → Capital... | {"$150,000": "Trap: applied the full 50% discount because the asset was held over 12 months, ignoring the foreign-residency exclusion", "$300,000": "Correct answer", "$225,000": "Applied a partial (25%) apportioned discount even though there was no Australian residency period", "$75,000": "Applied the 50% discount and ... | {"formula": "gain", "params": {"gain": 300000, "discount_rate": 0.5}, "expected": 300000.0} |
Q152 | Individual income tax | Net tax payable after LMITO (flat offset band) | Income tax offset | 2021-22 | medium | ["ITAA 1997 s 4-10", "ITAA 1997 s 61-575", "Income Tax Rates Act 1986 Sch 7"] | https://www.ato.gov.au/forms-and-instructions/low-and-middle-income-earner-tax-offsets | Roberto's taxable income is $74,000 for 2021-22. He is not eligible for the low income tax offset (his income is above $66,667). As his income is more than $48,000 but less than $90,000, he is eligible for a low and middle income tax offset of $1,500. The ATO reduces his tax payable of $14,517 by $1,500 using the LMITO... | $14,517 | $13,017 | $16,017 | $12,317 | B | $13,017 | 13,017 | AUD | Roberto's income ($74,000) is in the $48,001-$90,000 flat LMITO band, so the LMITO is the full $1,500 → Tax payable before offset = 14,517 (2021-22 rates: 5,092 + (74,000 - 45,000) x 0.325 = 5,092 + 9,425) → Net tax payable = 14,517 - 1,500 = 13,017 | {"$14,517": "Forgot to apply the $1,500 LMITO at all", "$13,017": "Correct answer", "$16,017": "Added the offset to tax payable instead of subtracting it", "$12,317": "Also subtracted a $700 LITO, but Roberto is not eligible for the LITO above $66,667"} | {"formula": "tax_payable_before_offset - lmito", "params": {"tax_payable_before_offset": 14517, "lmito": 1500}, "expected": 13017.0} |
Q153 | Depreciation | Instant asset write-off – small business (business-use apportionment, multiple assets) | Income tax (simplified depreciation, Div 328) | 2025-26 | medium | ["ITAA 1997 s 328-180", "IT(TP)A 1997 s 328-180"] | https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/instant-asset-write-off | On 22 October 2025, Liam (a sole trader using the simplified depreciation rules) buys a new laptop for $9,200 that he uses 75% of the time for his business. He also buys a new label printer for $1,200 that he uses only for business. Each asset costs less than the $20,000 instant asset write-off limit for 2025-26, so he... | $7,800 | $6,900 | $8,100 | $10,400 | C | $8,100 | 8,100 | AUD | Laptop: business-use portion = 75% x 9,200 = 6,900 → Label printer: used 100% for business = 1,200 → Combined deduction = 6,900 + 1,200 = 8,100 | {"$7,800": "Wrongly applied the 75% business-use factor to the printer as well", "$6,900": "Omitted the printer entirely", "$8,100": "Correct answer", "$10,400": "Claimed the full laptop cost, ignoring the 25% private-use reduction"} | {"formula": "computer_cost * computer_business_pct + printer_cost", "params": {"computer_cost": 9200, "computer_business_pct": 0.75, "printer_cost": 1200}, "expected": 8100.0} |
Q154 | Company tax | Base rate entity – passive income exactly 80% (boundary, still BRE) | Income tax (company) | 2024-25 | hard | ["ITRA 1986 s 23", "ITAA 1997 s 23AA", "ITAA 1997 s 23AB"] | https://www.ato.gov.au/tax-rates-and-codes/company-tax-rate-changes | Harbourview Pty Ltd has aggregated turnover of $8 million for 2024-25 (under the $50 million threshold). Its assessable income is made up such that exactly 80% is base rate entity passive income and 20% is active trading income. Its taxable income is $150,000. The base rate entity test requires passive income to be 80%... | $37,500 | $45,000 | $7,500 | $41,250 | A | $37,500 | 37,500 | AUD | Aggregated turnover is under $50m → A company is a base rate entity if 80% OR LESS of assessable income is base rate entity passive income → Passive income is exactly 80%, which satisfies the '80% or less' test, so the company IS a base rate entity → The 25% base rate entity rate applies: $150,000 x 25% = $37,500 | {"$37,500": "Correct answer", "$45,000": "Treated exactly 80% as failing the test and applied the 30% full rate, but 80% satisfies the '80% or less' test", "$7,500": "Applied only the 5% rate differential instead of the 25% base rate entity rate", "$41,250": "Used the superseded 27.5% base rate entity rate from an earl... | {"formula": "taxable_income * rate_bre", "params": {"taxable_income": 150000, "rate_bre": 0.25, "rate_full": 0.3, "rate_old": 0.275}, "expected": 37500.0} |
Q155 | Rental property | Holiday home – apportioned general expenses plus full agent fees and capital works, net result | Income tax (rental) | 2024-25 | hard | ["ITAA 1997 s 8-1", "ITAA 1997 Div 43", "IT 2167"] | https://www.ato.gov.au/forms-and-instructions/rental-properties-2025/rental-expenses | Sefina jointly owns a holiday home she owns for the whole of 2024-25. It is rented out (and genuinely available for rent) for 31 of the 52 weeks at $650 per week; she reserves it for her own private use the rest of the year. Her general expenses (interest, insurance, rates and maintenance) total $26,000 and must be app... | -$10,350.00 | $150.00 | $3,150.00 | $755.77 | B | $150.00 | 150 | AUD | Rent received = 31 × $650 = 20,150 → Apportion general expenses to the 31 weeks rented/available: (31 / 52) × 26,000 = 15,500 → Add the fully deductible agent fees ($1,500) and the full-year capital works deduction ($3,000): 15,500 + 1,500 + 3,000 = 20,000 total deductions → Net rental income = 20,150 − 20,000 = 150 | {"-$10,350.00": "Deducted the full year of general expenses instead of apportioning to the 31 weeks rented", "$150.00": "Correct answer", "$3,150.00": "Omitted the $3,000 capital works (Division 43) deduction", "$755.77": "Apportioned the agent fees by weeks too, instead of claiming them in full"} | {"formula": "weeks_rented*rent_per_week - ((weeks_rented/weeks_in_year)*gen_expenses + agent_fees + capital_works)", "params": {"weeks_rented": 31, "rent_per_week": 650, "gen_expenses": 26000, "weeks_in_year": 52, "agent_fees": 1500, "capital_works": 3000}, "expected": 150.0} |
Q156 | Income tests | Income for Medicare levy surcharge purposes + MLS liability (Tier 1, single) | Medicare levy surcharge | 2025-26 | easy | ["A New Tax System (Medicare Levy Surcharge—Fringe Benefits) Act 1999", "Medicare Levy Act 1986 s 8B-8G"] | https://www.ato.gov.au/individuals-and-families/medicare-and-private-health-insurance/medicare-levy-surcharge/medicare-levy-surcharge-income-thresholds-and-rates | In 2025-26 Liam is 38, single with no dependants and does not have an appropriate level of private patient hospital cover. His taxable income is $84,000 and he declares total reportable fringe benefits of $23,000, giving income for MLS purposes of $107,000. As a single with income between $101,001 and $118,000 he is a ... | $840.00 | $1,605.00 | $1,337.50 | $1,070.00 | D | $1,070.00 | 1,070 | AUD | Income for MLS purposes = taxable income + reportable fringe benefits = 84,000 + 23,000 = 107,000 → $107,000 is in the single Tier 1 range ($101,001-$118,000), the same tier as the base example, so the MLS rate is 1% → MLS = 107,000 x 1% = 1,070 | {"$840.00": "Applied the MLS to taxable income only, omitting the reportable fringe benefits", "$1,605.00": "Used the Tier 3 rate of 1.5% instead of the Tier 1 rate", "$1,337.50": "Used the Tier 2 rate of 1.25% instead of the Tier 1 rate", "$1,070.00": "Correct answer"} | {"formula": "(taxable_income + reportable_fringe_benefits) * mls_rate", "params": {"taxable_income": 84000, "reportable_fringe_benefits": 23000, "mls_rate": 0.01}, "expected": 1070.0} |
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