Arthur Peters and Martha Murray carry on a small mixed business in partnership. Gross income for the
Question:
Arthur Peters and Martha Murray carry on a small mixed business in partnership. Gross income for the 2020-21 tax year is $60,000, of which $10,000 is made on sales outside Australia.
The Expenses incurred in deriving the business income are as follows:
Expenses related to Australian source income
- Purchases $8,000
- Rates $350
- Business Insurance $1210
- Other expenses $40
- Improvements to business premises (1 Jan 2021)
Expenses relating to overseas source income
- Purchases $2,400
- Other expenses $600
- Ex-Australian import duties $240
Required:
Calculate the s 90 net partnership income and the partnership distribution to both Arthur (assuming he is an Australian resident) and Martha (assuming she is a non-resident). What difference would it make if it was alleged that Martha’s daughter Karen aged 14 years was a third partner? Assuming Karen was a full -time student and only worked in the business on weekends.
Show all calculations and cite relevant legislation to support your answer.
Introduction To Federal Income Taxation In Canada
ISBN: 9781554965021
33rd Edition
Authors: Robert E. Beam, Stanley N. Laiken, James J. Barnett