Mick owns one rental property which was rented for the entire income year. Four council rate notices are received by him during an income year totalling $2,000, but only three were paid totalling $1,500. He has a present legal obligation to pay all four. What amount is deducible to Mick in his income tax return?
Question 8 options:
a)
$1,500
b)
$1,750
c)
$2,000
The amount deductible to Mick in his income tax return would be the total amount of the unpaid council rates, as he has a present legal obligation to pay all four notices. Therefore, the deductible amount in Mick's income tax return is the full amount of the unpaid council rates.
Answer: c) $2,000
