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TAXATION LAW. EXPLANATION OF NET INCOME OF PARTNERSHIP

   

Added on  2023-03-23

6 Pages390 Words44 ViewsType: 44
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TAXATION LAW
TAXATION LAW. EXPLANATION OF NET INCOME OF PARTNERSHIP_1

EXPLANATION OF NET INCOME OF
PARTNERSHIP FOR 2018/19
• ACCORDING TO THE “DIVISION 5 OF THE ITAA 1936” PARTNERSHIP IS
NOT REGARDED AS THE SEPARATE ENTITY UNDER THE GENERAL LAW AND
THE PARTNERSHIP DOES NOT PAY TAX.
• RATHER UNDER “SECTION 92, OF THE ITAA 1936” IT IS THE PARTNERS
THAT PAY TAX ON THE PROFITS THAT IS DISTRIBUTED TO THEM.
• “SECTION 91” EXPLAINS THAT PARTNERSHIP SHOULD LODGE INCOME TAX
RETURNS IN ORDER TO SHOW HOW THE PROFITS ARE DISTRIBUTED AMONG
THE PARTNERS.
TAXATION LAW. EXPLANATION OF NET INCOME OF PARTNERSHIP_2

EXPLANATION OF NET INCOME OF
PARTNERSHIP FOR 2018/19
• The net income of the partnership includes the taxable income after
deducting the allowable deductions.
• Under “section 92 (2)”, the net partnership loss for 2017/18
amounting to $20,000 is not allowed for deduction rather it will be
distributed to individual partners.
• With respect to “section 90”, the net income of $321,000 in 2018/19
must be split equally among the three partners with each getting
$107,000.
TAXATION LAW. EXPLANATION OF NET INCOME OF PARTNERSHIP_3

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