Practical advice with recommendations to Client B with specifically addressing the following: What is the amount of taxable income for BetterStream Superannuation Fund for the 2022/23 tax year. What is the final tax liability for the fund, BetterStream?

Lazarus Morrison is a director of Fire Ball Pty Ltd, an Australian resident private company with a corporate tax rate for imputation purposes of 30% for the 2022/23 income year.

Fire Ball Pty Ltd sells firecrackers and account for taxable income on an accrual basis. Lazarus has provided the following information regarding the completion of the company's franking account for the year ended 30 June 2023. (Ignore the small business concessions)

1 July 2022, the balance in the franking account was $13,000.

24/8/2022 PAYG instalment paid for June quarter 2022 $1,860

30/8/2022, a dividend of $14,600 received from Australian Bank Ltd (an Australian resident public company for tax purposes) franked to 60%.

25/11/2022 PAYG instalment paid for September quarter 2022 $1,450

12/12/2022 Fully franked Dividend paid $32,000

28/2/2023, an unfranked dividend of $15,000 from Lowes Ltd (an Australian resident public company for tax purposes).

28/2/2023 PAYG instalment paid for December quarter 2022 $1,450 25/5/2023 PAYG instalment paid for March quarter 2023 $1,450

June quarter 2023 PAYG instalment amounted to $1,450. The payment will be paid on 25 August 2023.

Further information

Fire Ball Pty Ltd was incorporated in 2016, ran a business of assembling, repairing and selling bicycles that were manufactured in Australia. Fire Ball had four equal shareholders who each held 100 of the 400 shares in the company. The business was successful until 2019/20 when there was a downturn in sales. As a result, there was a tax loss of $15,000 for 2019/20.

On 1 September 2020, three shareholders sold their shares to Neil Solski and since then, Lazarus Morrison and Neil Solski were two shareholders of the company. The business expanded into the sale of firecrackers and 17 December 2021, the company stopped bicycle operations and fully focused on sale of firecrackers. The company made another tax losses of $7,000 and $5,000 for 2020/21 and 2021/22 respectively.

Then Fire Ball Pty Ltd derived a profit in the 2022/23 income year and wants to carry forward the tax losses from 2020 to 2022 as a deduction to reduce its 2023 taxable income of $47,000.