Steps for

Your Task

Your task is to analyse client information outlined in the two different case studies below and

present the findings in two Statement of Advice

You are required to provide advice on preparation of partnership tax return $(N$&$S$ partnership$)$

You are required to calculate the franking account and tax payable by Technical Solutions Pty

Ltd$.$

For each question you are expected to:

identify the facts and issues for each case

apply the relevant legislation and$/$or case law.

Statement of Advice $1-$ Preparation of a tax return for a partnership taxpayer

Your client Nicole and Sam attended your office to have their $2023-$year tax return prepared.

Nicole Mania & Sam Baker are equal partners of N&S partnership that is in the business of

manufacturing shelters for pets. Both have contributed equal amounts of capital. Nicole is a silent

partner while Sam spends most of the time working in the partnership business. To reflect the extra

time that Sam spends in the business, they have agreed that Sam should receive an annual salary

of $$80,000.$ As per the partnership agreement, Nicole and Sam will share partnership profits equally

after allowing salaries and interest on capital.

The following information was provided by the business.

Note: interest on capital for Nicole $$2,600,$ Interest on capital for Sam $$2,900$ and Interest paid to

Sam $$7,800$ for loan borrowed, partnership used the loan to maintain working capital$)$

Proceeds from sale of various assets during $2023$

Sale of Qantas shares held as an investment ${?}^{(a)}$$$8,900$

Sale of Telstra shares held as an investment ${?}^{(b)}$$$$7,500$

Sale of land held as an investment ${?}^{(c)},$$$120,000$

Sale of business car used for delivering goods ${?}^{(d)}$$$19,000$

Further information regarding the disposal of the partnership's assets

a$)$ Qantas shares were purchased on $1$ March $2020$ for $$11,600$

b$)$ Telstra shares were purchased on $22$ November $2022$ for $$2,100$

c$)$ Land was purchased on $8$ May $2010$ for $$70,000$

d$)$ The business car was purchased on $1$ July $2020$ and had an adjustable value of $$10,500$ at the

time of disposal.

Other information: Nicole is also employed by an Australian Bank and earned a total salary of

$$60,000.$

What is the ITAA$36s90$ net income of the partnership?

How much is to be allocated to each partner?

What is the taxable income for Nicole and Sam who are equal partners of the N&S partnership?

Statement of Advice $2-$ Calculate the franking account and tax payable by Technical

Solutions Pty Ltd$.$

Jerry Seinfeld is a director of Technical Smart Solutions Pty Ltd$,$ an Australian resident private

company, with a corporate tax rate for imputation purposes for the $2022/23$ income year of $30\%.$

Jerry provided you with the following information regarding the company's franking account:

Other information

$(1)$ Benchmark franking percentage for Technical Solution Pty Ltd is $100\%$

$(2)$ Technical Solutions Pty Ltd has a taxable income of $$47,000$ for $2022/23.$

Required

Prepare Technical Solutions Pty Ltd$\text{'}$s franking account for the $2022/23$ tax year $($you must use

the running balance table to complete the franking account$)$ and explain$/$advise any

consequences arising from the franking account balance at $30$ June $2023.$

Calculate net tax payable $($refundable$)$ for the company.