QUESTION 5 (complete parts A and B) PART A The Crawford Family Trust is a discretionary...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
QUESTION 5 (complete parts A and B) PART A The Crawford Family Trust is a discretionary trust established by Diane Crawford before she commenced medical practice. According to the trust deed, primary beneficiaries are Diane and her children or grandchildren, while secondary beneficiaries include spouses of primary beneficiaries. The trust recorded the following transactions during the year: Receipts Interest of fixed income securities Unfranked dividends Rent from residential property investments Expenses Rental investments repairs, rates & insurance Accountant fees Payment of Jill's university fees 25,000 120,000 50,000 12,000 1,000 22,000 The accounts were struck at 30 June 2020 and the trustee resolved to set aside trust net income for the following trust beneficiaries: Arthur, who is Diane's husband age 57: net income Jill, a daughter age 21 and at university: Graham, a son age 13 and at school full time: $22,000 to be held by trustee half of nil Trust income for children is to be held by the trustee until they achieve age 18, or otherwise passes to their estate if they die before this date. Required: a) Calculate the trust net income according to s.95 ITAA36 (3 marks) b) Explain the process by which each item of net income is assessed PART B Omega Super is a complying superannuation fund. The audited operating statement for the income year is provided below: Receipts Contributions from employers Personal non-concessional contributions Interest on fixed-term securities Franked dividends (franking credit $30,000) Proceeds from the sale of commercial property Expenses Administration expense Life insurance premiums to provide death cover for members Benefits paid to members Benefits accrued to members before income tax $ 250,000 44,000 50,000 70,000 900,000 45,000 22,000 60,000 1,187,000 Other information: • Interest on the fixed-term securities was derived from segregated current pension assets, paying current retirement phase account-based pensions. • The commercial property was purchased as an investment on 1 June 2002 for $300,000. There are no further CGT events this year and no carry forward net capital losses of prior years. Required: a) Calculate the taxable income of the superannuation fund, explaining the effect of each item listed. (7 marks) b) Calculate the tax payable by the superannuation fund. (2 marks) (11 + 9 = 20 marks) QUESTION 5 (complete parts A and B) PART A The Crawford Family Trust is a discretionary trust established by Diane Crawford before she commenced medical practice. According to the trust deed, primary beneficiaries are Diane and her children or grandchildren, while secondary beneficiaries include spouses of primary beneficiaries. The trust recorded the following transactions during the year: Receipts Interest of fixed income securities Unfranked dividends Rent from residential property investments Expenses Rental investments repairs, rates & insurance Accountant fees Payment of Jill's university fees 25,000 120,000 50,000 12,000 1,000 22,000 The accounts were struck at 30 June 2020 and the trustee resolved to set aside trust net income for the following trust beneficiaries: Arthur, who is Diane's husband age 57: net income Jill, a daughter age 21 and at university: Graham, a son age 13 and at school full time: $22,000 to be held by trustee half of nil Trust income for children is to be held by the trustee until they achieve age 18, or otherwise passes to their estate if they die before this date. Required: a) Calculate the trust net income according to s.95 ITAA36 (3 marks) b) Explain the process by which each item of net income is assessed PART B Omega Super is a complying superannuation fund. The audited operating statement for the income year is provided below: Receipts Contributions from employers Personal non-concessional contributions Interest on fixed-term securities Franked dividends (franking credit $30,000) Proceeds from the sale of commercial property Expenses Administration expense Life insurance premiums to provide death cover for members Benefits paid to members Benefits accrued to members before income tax $ 250,000 44,000 50,000 70,000 900,000 45,000 22,000 60,000 1,187,000 Other information: • Interest on the fixed-term securities was derived from segregated current pension assets, paying current retirement phase account-based pensions. • The commercial property was purchased as an investment on 1 June 2002 for $300,000. There are no further CGT events this year and no carry forward net capital losses of prior years. Required: a) Calculate the taxable income of the superannuation fund, explaining the effect of each item listed. (7 marks) b) Calculate the tax payable by the superannuation fund. (2 marks) (11 + 9 = 20 marks)
Expert Answer:
Answer rating: 100% (QA)
QUEST ION 5 complete parts A and B PART A Required a Calculate the trust net income according to s95 ITAA36 3 marks ANSWER Trust net income Receipts Expenses 195000 33000 162000 EXPLANATION Trust net ... View the full answer
Related Book For
South Western Federal Taxation 2016 Corporations Partnerships Estates and Trusts
ISBN: 9781305399884
39th edition
Authors: James Boyd, William Hoffman, Raabe, David Maloney, Young
Posted Date:
Students also viewed these accounting questions
-
The Robinson Family Trust is a discretionary family trust with two resident beneficiaries, Tom and grace. During this income year of 2019-2020, the activities of the trust gave rise to the following:...
-
Parts a and b of the drawing show the same uniform and constant (in time) magnetic field directed perpendicularly into the paper over a rectangular region. Outside this region, there is no field....
-
Compare your answers from parts a and b of Exercise 43 with ÎH values calculated for each reaction using standard enthalpies of formation in Appendix 4. Do enthalpy changes calculated from bond...
-
1. An auditor selected a product maintained in the finished goods Warehouse. The auditor counted the product and compare this amount what the amount in the finished goods Perpetual inventory...
-
What type of syndicate data will be useful in addressing the marketing research problem?
-
When one race car passes another during a race, the passing car usually tries to pass on the inner lane of a curve in the track. Why?
-
For a mixture of \(70 \mathrm{~mol} \%\) chloroform, \(15 \mathrm{~mol} \%\) acetone, and \(15 \mathrm{~mol} \%\) ethanol at \(1 \mathrm{~atm}\), show on a residue curve map the feasible compositions...
-
Murray Inc. manufactures bicycle frames in two departments: Cutting and Welding. Murray uses the weighted average method. Manufacturing costs are added uniformly throughout the process. The following...
-
A narrow beam of light with wavelengths from 480 nm to 780 nm is incident perpendicular to one face of a prism made of crown glass, for which the index of refraction ranges from n = 1.541 to n =...
-
Rainmaker Environmental Consultants is just finishing its second year of operations. The companys unadjusted trial balance at October 31, 2023, follows. Rainmaker prepares adjustments each October...
-
Could you elaborate on three technological innovations designed to support young children with special needs or those requiring assistance with language development?
-
The ___________ begins to run upon the sale of a product.
-
True Or False Contributory negligence prevents a negligent plaintiff from recovering unless the defendant is more negligent than the plaintiff.
-
True Or False Those states that have adopted comparative negligence have either abolished assumption of risk as a separate defense or have merged it into the defense of comparative negligence.
-
A doctor will not necessarily have to disclose a risk if a. the risk is highly improbable, and the doctor believes that disclosing it would severely reduce the effectiveness of the treatment. b. the...
-
In assessing a plaintiffs conduct who has allegedly assumed the risk, a(n) ____________ standard is used, whereas in assessing a plaintiffs conduct who was allegedly negligent, a(n) ____________...
-
7. Consider a 160-day forward con- tract on an asset priced at $135. The asset generates cash flows of $1.50 in 40 days and $1.75 in 120 days. It in- curs storage costs of $1.25 in 60 and 120 days,...
-
Identify the source of funds within Micro Credit? How does this differ from traditional sources of financing? What internal and external governance mechanisms are in place in Micro Credit?
-
Pursuant to a complete liquidation in the current year, Scarlet Corporation distributes to Jake land (basis of $425,000, fair market value of $390,000) that was purchased three years ago and held as...
-
An exempt organization is considering conducting bingo games on Thursday nights as a way of generating additional revenue to support its exempt purpose. Before doing so, however, the president of the...
-
In May 2014, Dudley and Eva enter into a property settlement preparatory to the dissolution of their marriage. Under the agreement, Dudley is to pay Eva $6 million in satisfaction of her marital...
-
The English scores for a sample of 14 students Find the mean, the median, and the mode of the data, if possible. If any measure cannot be found or does not represent the center of the data, explain...
-
The salaries (in thousand dollars) of a sample of 10 employees Find the mean, the median, and the mode of the data, if possible. If any measure cannot be found or does not represent the center of the...
-
The durations (in minutes) of idle times at a factory in the last 10 months Find the mean, the median, and the mode of the data, if possible. If any measure cannot be found or does not represent the...
Study smarter with the SolutionInn App