Reference no: EM133613300
Trenton Trust is a trust to provide for the wellbeing and future finances of the Trenton family members. The trust is an investment trust.
Income and expenditure were as follows:
Income $
Fully franked dividends from ABC Pty Ltd (attached franking credits of $3,428.62) 8,000
Unfranked dividend from Chippie Ltd 19,000
Interest income on term deposit 17,103
Sale of Factory 900,000
Profits from the sale of shares 76,240
Expenditure
Rates & taxes on commercial investment property 3,156
Legal fees in collecting outstanding rent from a commercial tenant 7,125
Advertising commercial investment premises 4,250
Interior design fees for remodelling commercial investment premises (billed but not yet paid at year end) 12,000
Repair of factory roof leaks (billed but not yet paid) 75,020
Insurance for commercial premises 6,700
Losses from the sale of shares (current income year) 5,350
Legal costs associated with the preparation of the lease agreement 1,800
Additional information
Trenton Trust owned a factory building this was sold in the current income year for $900,000. The factory was bought for $219,000 when they purchased the property 18 years ago. They have paid $50,000 in interest on the mortgage during the ownership period. They also paid real estate agents fees of $3,557 on the purchase and sale of the property. Duties of $2,185 were paid at the time of purchase. The repair of the factory roof leaks was so significant it involved the replacement of the entire roof.
The trust income was distributed as follows:
1 Lizzy (32) is specifically entitled to all of the dividend income (and franking credits). Lizzy is a fulltime student. However she also works part time at Brittany Burgers and receives $18,000 in Salary.
2 Marnie (16) is specifically entitled to 100% of the capital gains made by the trust. Marnie has no other sources of income, apart from some interest from her savings account that her parents established for her of $450 and a franked dividend from some shares her father bought her. The franked dividend is $5,100 and the franking credit attached is $1,700.
4 The remaining income is to be equally split between Stephan (21) and Bradley (48).
Calculate the net income and Division 6E income of the trust.
Calculate the taxable income (if any) of each beneficiary and the net tax payable by each beneficiary or the trustee. Explain and state the section numbers under which the Trust income will be assessed. You do not need to calculate offsets or Medicare Levy