question archive Jason Dompok, aged 34, is a Malaysian tax resident
Subject:LawPrice: Bought3
Jason Dompok, aged 34, is a Malaysian tax resident. He provided the following details
regarding his income for the basis year 2017:
Income from non-business sources:
i. Jason owns a house in Johore Bahru. He provides the following information for the
year ended 31 December 2017:
Income RM
January 2017 to May 2017 (RM3,000 per month) 15,000
June 2017 to August 2017 (vacant) Nil
September 2017 to December 2017 (RM3,200 per month) 12,800
Expenses
Refund of one month deposit to previous tenant 3,200
Commission to real estate agent for finding replacement tenant 3,200
Interest on loan (January 2017 to December 2017) 18,400
Quit rent and assessment 1,600
Repainting of the house 13,400
Porch extension 18,500
Fire insurance premium 1,600
ii. Dividends
a) On 14 July 2017, Jason received RM12,000 as dividends from Sarawak
Chemicals Bhd.
b) He also received the equivalent of RM10,300 in dividends on 28 November
2017 from shares invested in Hong Kong. Of this amount, only RM 7,000 was
remitted back to Malaysia as at 31 December 2017.
iii. Royalty
Royalty of RM62,000, was derived from Malaysia and was received during the year
for writing a book on Malaysian gardening. During the year, he incurred typing and
proof reading expenses of RM14,400.
Jason's wife, Eleanor a Malaysian tax resident, is a tailor and runs her business from home.
a) The net income from her business after deducting allowable expenses was
RM19,600.
b) As a part time real estate agent, Eleanor received commission of RM22,000 on sale
of properties in Malaysia.
c) She also received interest income of RM7,450 from Maybank in 2017 on her fixed
deposit account.
Jason and Eleanor provided the following additional information f for the year ended 31
December 2017:
4
Jason Eleanor
RM RM
Donations to approved institution:
? Cash 5,000 1,000
? Computer and school supplies to orphanage 2,400 -
Medical expenses incurred in respect of:
? complete medical examination (for Jason and
Eleanor)
570 980
? Daughter Barbara 26,600 -
Purchase of books and magazines 1,400 -
Insurance premiums:
? Life policy (life of Jason and Eleanor) 7,000 4,000
? Medical and education policy 5,100 -
Treadmill for family 4,500
Computer (replaced after 3 years) 4,500 -
The couple have three children:
a) The first son, Harry, aged 5, is studying in a kindergarten registered under the
Education Act 1996. Eleanor spent RM12,000 on his fees for the year.
b) The second daughter, Barbara, aged 4 is disabled. She had a heart operation
during the year due to a "serious disease".
c) Their youngest daughter, Diana is 1 year old and Eleanor spent RM1,200 on
breast feeding equipment.
Eleanor's mother is 70 years old and has no income of her own. She lives with them. She
was hospitalized during the year and Eleanor incurred medical expenses of RM9,300.
Required:
(a) Compute the income tax payable by Jason and Eleanor for the year of
assessment 2017. Eleanor is not electing for joint assessment, and would be
claiming all the child relief.
(24 marks)
(b) Based on the facts above, list three advantages to Jason and Eleanor in NOT
electing for joint assessment.
(6 marks)
[Total: 30 marks]