Renovations Pty Ltd (“RPL”) has been in the business of home renovation for over 30 years. Following a downturn in the renovations market however, RPL sought out new sources of income. In 2012, RPL decided to purchase old run-down houses in the inner-city, renovate them and lease them out for very high rents.After some time, the directors of RPL decided that the company should again concentrate on its core business activity. Consequently, in the current tax year (2017/2018) RPL sold the houses it had renovated for rental and made large profits.With reference to legislation and case law, advise RPL on the tax implications regarding the profits it made during the 2017/2018 tax year. You are not required to undertake any capital gains calculations, the focus of this question is income principles and concepts only. Jack is the state sales representative for Quantum Vaccum Cleaners Pty Ltd (“QVC”), a supplier and retailer of vacuum cleaners. On 1 October 2017, QVC supplied Jack with a car valued at $65,000 for work which was garaged at Jack’s home on the weekends. Also on 1 December 2017, QVC loaned Jack $10,000 at 2% interest pa and provided him with a vacuum cleaner which retails for $2,000, a car air freshner valued at $75 to help keep the car smelling fresh. Jack used the money to pay for repairs to his investment property.By 31 March 2018, Jack had travelled a total of 12,700 kms in the car, with 3000 kms being for private use on weekends. QVC pays $20,000 a year in lease payments in respect of the car and has to date paid $4,000 for maintenance and repairs and $3,500 for registration and insurance in relation to the car it provided Jack. Jack has paid $5,000 in fuel expenses. Jack keeps all invoices, receipts and odometer readings.QVC is unsure how the above will be treated for taxation purposes and has come to you for advice.Required: By reference to legislation and relevant case law (if any), calculate the total tax liability arising from the above transactions.