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Question

(Trusts - Discretionary distribution)

The estate of the Late Olivia Little (died

2015) derived a net income of $140,000 during the 2017/18 tax year.

The will provided that trust income was to be distributed as follows:

Tim Her husband 40% of any income

Shaun Her 25 year old son who has been certified insane 25% of any income

Rosa Her 20 year old daughter who is a full-time student 15% of any income

Kristy Her 17 year old daughter who is employed full-time 10% of any income

The Will also provided that the balance be either retained or distributed to a beneficiary at the discretion of the trustee. During the tax year, an additional amount of $9,000 was paid towards Rosa's overseas trip.


Required:

Complete the following table (covering all beneficiaries) nominating:

·        Name of the BENEFICIARY

·        Whether or not the beneficiary is PRESENTLY ENTITLED

·        Whether or not the beneficiary is under a LEGAL DISABILITY

·        WHO IS ASSESSED on each amount

·        Which sections of the ITAA36 apply to make the income assessable

·        The AMOUNT retained or distributed.


Beneficiary Presently entitled? (Yes/No) Legal disability? (Yes/No) Who is assessed?(Beneficiary or Trustee) ITAA36Section(s) Amount $

Applicable


Tim

Shaun

Rosa

Kristy

Balance

Total

$

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