Trust Income Tax Calculation

This assignment involves calculating the total taxable income and tax payable for a trust named 'Trust Name'. It details various income streams, allowable deductions like veterinary payments and university fees, and ultimately arrives at the final tax liability including Medicare Levy. The document provides a step-by-step solution with clear explanations of each calculation.

Running head: TAXATION LAW
Taxation Law
Name of the Student
Name of the University
Authors Note
Course ID

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Table of Contents
Answer to A:..............................................................................................................................2
Answer to B:..............................................................................................................................3
Answer to C:..............................................................................................................................4
Answer to D:..............................................................................................................................7
Reference and Bibliography:......................................................................................................8

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Answer to A:
Computation of Taxable Income of Percy
For the year ended 2016/17
Particulars Amount ($) Amount ($)
Taxable Income 173060
Tax free Component 18200
Tax on taxable income 51664.2 51664.2
Medicare Levy 3461.2
2595.9 6057.1
Total tax payable 57721.3
Tax withheld 70000
Franking Credit 1440 71440
Tax Refundable 13718
As evident from the above stated computations the below stated are the following
assumptions that are considered in computing the tax return of Percy Grainger;
a. The receipts of salary would be considered for assessment under section 6-5 of the
ITAA 1997 (Barkoczy 2016).
b. The dividend income derived by Percy would be subjected to franking credits of 30%
of the total dividend derived.
c. The computations of net capital gains are ascertained based on the 50% capital gains
discount from sales of assets and shares.
d. Percy would be also entitled to deductions under section 8-1 of the ITAA 1997, for
the expenses incurred in seminar as the they are directly related for work purpose
(Tan et al. 2016).
e. Additionally, it has been found that Percy had incurred expenses on communicating
and the same would be considered as an allowable deduction under section 8-1 of the
ITAA 1997.

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f. According to the Australian taxation office individual would be able to claim an
allowable deduction for the expenses incurred on the accountant for preparing the tax
return (Snape and De Souza 2016). As a result of this, Percy has incurred expenditure
on the accountant for preparing the tax return and the same would be liable for
claiming an allowable deduction.
g. A deduction is generally considered allowable for the cost incurred on the travel
incurred by the employee at the time of travelling overnight during the course of
employment (Cao et al. 2015). Similarly, travelling cost incurred on venues would be
considered for as an allowable deduction.
Answer to B:
Statement showing Calculation of Income from Partnership
Particulars ($) ($)
Cash from sale of tickets and musical instrument 4,32,000.00
Cash received from debtors 34,000.00
Amount of Bad debts recovered 1,000.00
Insurance Proceeds 20,000.00
The amount of gross total income 4,87,000.00
Expenses eligible as deduction:
Advertisement 3,000.00
Cash paid to creditors 1,43,000.00
Council Rates 6,000.00

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Legal expenses on Bank loan 2,000.00
Payments of acoustics 45000
Repairs on water damaged stocks 8000
Repairs from storm damage 14000
Staff wages 1,21,500.00
Superannuation for staff 7,600.00
Other expenditure 60,000.00
Cost of goods sold {(Opening stock ) – Closing stock} 16,500.00
4,26,600.00
Net income of the partnership firm for the income year 60,400.00
Answer to C:
Statement showing Calculations of Income from Partnership
For the year ended 30 June 2017
Particulars Sections
Amount
($)
Amount
($)
Fees Received
Section 6-5 of ITAA
1997 230000
Gross Total Income 230000
Expenses eligible as deduction:

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Rent of training venue
Section 8-1 of ITAA
1997 35000
Salary of part time music teachers
Section 8-1 of ITAA
1997 125000
Superannuation contribution for part-time
chefs
Section 8-1 of ITAA
1997 11900
Bank loan repayments principal
Section 8-1 of ITAA
1997 2800
Bank loan repayments interest
Section 8-1 of ITAA
1997 1500
GrossTotal Expenditure from partnership
business 176200
Net income of the partnership in the income
year 53800
Statement showing Calculation of Income from Partnership
For the year ended 30 June 2017
Particulars Amount ($) Amount ($)
Fees Received 230000

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Bank Loan 45000
Loan from Johann 33000
Interest on Drawing Percy 400
Interest on Drawing Johann 860
Total Receipts 309260
Expenses eligible as deduction:
Rent of venue 35000
Salary of part time music teachers 125000
Partners Salary 95000
Interest on Capital 7800
Drawings 18000
Superannuation contribution for part-time music teachers 11900
Bank loan repayments principal 2800
Bank loan repayments interest 1500
Gross Total Expenditure from partnership business 297000
Net income of the partnership firm for the income year 12260
Answer to D:
In the Books of Grainger Family Trust

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For the year ended 2016/17
Particulars Amount ($) Amount ($)
Net Income of Trust 43000
Share of Net Income from Trust
Percy Grainger 10000
James Grainger 10000
Scott Grainger 2000
Jennifer Grainger 1000
Oliver Graiger 1000 24000
Total Assessable Income from Trust 67000
Allowable Deductions
Payment of Future Veterinary 2000
Payment of University Fees 3500
Payments of Day-care 1500
Total Allowable Deductions 7000
Total taxable income of trust 60000
Tax on Taxable income 11047
Add: Medicare Levy 1200
Total Tax Payable 12247