Steve and his cousin Alex started an equal partnership business, Euca Sanitizers, motivated by the increase in
Question:
Steve and his cousin Alex started an equal partnership business, Euca Sanitizers, motivated by the increase in the recent demand for hand sanitizers during the COVID-19 pandemic. Steve lives in Sydney and is an Australian resident for tax purposes. Alex however, is a resident of New Zealand and is a foreign resident for tax purposes in Australia. On 30 June 2020, Euca Sanitizers partnership net income is $300,000, 60% of this income is generated from selling hand sanitizers to Australian retailers and 40% comes outside Australia from sale of hand sanitizers to New Zealand retailers.
Required:
With reference to relevant provisions of ITAA 97/ITAA 36, discuss how the partnership income is taxed.
Horngrens Financial and Managerial Accounting
ISBN: 978-0133255584
4th Edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura