Question

The Robinson Family Trust is a discretionary family trust with two resident beneficiaries, Tom and grace. During this income year of 2019-2020, the activities of the trust gave rise to the following:

	$
Loss from rental property	(3,000)
Interest income from term deposits	2,000
Cash received from non frankeddividends	9,000
A capital gain from the sale of Telstra’s shares that had been held for three years	8,000

The trustee of the trust resolved to distribute 100% of the trust income to Grace.

Grace also has the following income:

•           Net Salary of $50,000 (PAYG withholding tax instalments of $5,000 have been deducted).

•           Work-related expenses of $3,000

Grace has private hospital cover.

Required:

Calculate the taxable income and tax payable or refundable for Grace for the income year. Please show all your workings.

Answer 1

	Income Tax Computation for Grace for 2019-2020
	Particulars	Amount
	Total Income	$66,000
	Total Deductions	$12,200
	Total Exemptions	$0
	Taxable Income	$53,800
	Regular Taxes	$7,695
	Alternative Minimum Tax	$0
	Net Investment Income Tax	$0
	All Tax Credits	$0
	Total Tax with Credits	$7,695
	Marginal Tax Rate	22%
	Tax Pre-payments	$5,000
	Tax Amount Owe	$2,695
Notes
1	Total Income	=	Net Salary + Interest Income from Term Deposit + Cash Received from Dividend + Capital Gain from Sale of Shares - Loss from Rental Property
		=	50,000 + 2000 + 9000 + 8000 -3000
		=	$66000
2	Total Deductions	=	Taking Standard Deduction allowed to Single Tax Payers of $12200
			Itemized Deduction will amount to deduction of only $3000 of Work related expense & amount paid for Private hospital Cover not mentioned, total of which which is less than Standard Deduction
3	Regular Taxes	=	Calculated as per Tax Slab Below
		Tax Bracket	Single	Calculation	Amount
		10%	$0 to $9,700	9700*10%	970
		12%	$9,701 to $39,475	(39475-9700)*12%	3573
		22%	$39,476 to $84,200	(53800-39475)*22%	3151.5	As Gross total Income is $53800
		24%	$84,201 to $160,725		0
				Total	7694.5
4	Pay G Withholding Tax Installment of $5000 is to be deducted from total Tax on Taxabale Income as already deducted by Employer.

Answer - Taxable Income is $53800 & Tax Payable is $2695 of Grace for Income year 2019-2020.