Paraphrasing - Assignment Questions

Question Four (20 marks)

Part B 

The Short (living) trust derived $60,000 of interest income and $27,000 in fully franked dividends during the income tax year 2020/21. 

The net trust income was distributed accordingly to the following beneficiaries: 

(a) $40,000, including the franked distribution, to Sally, who is aged 62 and a resident and has no other income, with

(b) the remaining amount was distributed to Jack, a 42 year- old non-resident. 

Required:

Calculate the s. 95 net income of the trust and the tax implications for Sally and Jack citing relevant legislation to support your answer.  (8 marks)