Stephanie and David are a married couple who run a small business in a 50:50 partnership structure
Question:
Stephanie and David are a married couple who run a small business in a 50:50 partnership structure selling agricultural produce. There is no written partnership agreement.
During the year ended 30 June 2021 they generated $480,000 in sales of agricultural produce and incurred $50,000 in deductible expenses.
The partners appropriated the following partnership salaries to each other:
Stephanie $112,000
David $ 24,000
- Stephanie and David also own an investment property as joint tenants which generated $180,000 in gross rent and had $28,000 in deductible expenses.
- They have two children, twins, Oliver and Olivia both 23 and fulltime university students.
- The twins live with their parents, and they do not have any other income.
- The family does have private health insurance.
Required:
- Construct the partnership net income of the business entity for the year ended 30 June 2021
- Prepare and calculate a partnership distribution statement for the business entity for the year ended 30 June 2021
- Evaluate the income tax consequences of a partnership structure with respect to the individual partners of the business entity for the year ended 30 June 2021