Reference no: EM132071894

The Johnson Trust is a resident discretionary intervivos trust carrying on hospitality trading activities. During the 2015/2016 income year the trust made a loss of $25,000 calculated in accordance with s 95(1) ITAA 1936. The Johnson Trust has performed better in 2016/2017, with income comprising: Profit from the business activities $123,000 Interest on term deposit $10,000 Fully franked dividend (including imputation credits) $24,000 During the 2016/2017 income year, tax deductible business expenses of $26,000 were incurred. The trustee has exercised discretion to make the following payments to beneficiaries who all have a vested interest in the income of the trust: Julia, aged 76, who suffers dementia and is currently in a mental institution, unable to give discharge to a legal contract 10% of trust net income Malcolm, aged 52 15% of trust net income Tony, aged 34 30% of trust net income Kevin, aged 12 10% of trust net income which is to be accumulated indefeasibly and paid at age 21. In the event of his death Kevin’s share will be paid to his estate. Any remaining income is to be retained in the trust for re-investment purposes. Calculate and explain the trust net income and distribution for the year ended 30 June 2017, making reference to any relevant statute, and/or general law.