RTS Pty Ltd, a resident private company, was incorporated on 1 July 2018. From 1 July 2018
Question:
RTS Pty Ltd, a resident private company, was incorporated on 1 July 2018. From 1 July 2018 until 30 June 2020, it conducted a news agency business. The company incurred the following trading losses for tax purposes:
• $30,000—year ended 30 June 2019, and
• $40,000—year ended 30 June 2020.
In July 2020, the company discontinued its news agency business, restructured and acquired a family restaurant business. The company’s shareholdings of ordinary shares at the close of each financial year were as follows:
Shareholders | 2019 | 2020 | 2021 | |
$ | $ $ | |||
A | 200 | 200 | 200 | |
B | 200 | 200 | 200 | |
C | — | 600 | 600 | |
D | — | — | 800 | |
400 | 1000 1800 | |||
For the tax year ended 30 June 2021, the company reported taxable income of $70,000.
Required:
Discuss the tax implications of the above events for RTS Pty Ltd. for the year ended 30 June 2021, citing relevant legislation and showing all calculations.
Expert Answer:
As we can see here the loss has been incurred by the company which was doing a travel agency busines... View the full answer
