Junior Ltd had a tax loss of $500,000 from previous years. On 1 July of the current
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Question:
Junior Ltd had a tax loss of $500,000 from previous years. On 1 July of the current income year, Mr. X buys all the shares in Junior Ltd upon advice from Tina. Tina then suggests that Mr.X transfers $500,000 income from his own family trust into Junior Ltd, which will reduce the trust's income to $5,000 and leaves Junior Ltd with a zero taxable income.
Required:
Critically evaluate Tina's suggestion with particular reference to ITAA1936 Part IVA and discuss whether Part IVA would apply.
Related Book For
Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett
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