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Trust loss questions – start with income.
Trust Loss Questions
How do you treat trust losses when these losses include ordinary and/or capital losses and when these losses do or don’t offset ordinary income and/or capital gains?
This is the question will discuss with you in this mini-series about trust losses from episode 401 all the way to episode 405.
In this episode, ep 401, we go to the very start and look at trust income. Because we need to understand trust income before we can talk about trust losses. So we really should have called this episode trust income questions.
Here is what we learned but please listen in as Ron explains all this much better than we ever could.
To listen while you drive, walk, or work, just access the episode through a free podcast app on your mobile phone.
Trust Loss Questions
In this episode, Ron Jorgensen of Thomson Geer in Melbourne will go through four questions about trust income with you to prepare for our discussion of the tax treatment of trust losses.
Question # 1 – Has TR 2012/D1 been finalised yet?
TR 2012/D1 is still in draft form. So the ATO will follow it but can’t issue penalties if you don’t follow it.
Question # 2 – Items 56 and 57 are what?
Item 56 is ‘Income of the Trust Estate’. And Item 57 is ‘Income to which no beneficiary is presently entitled’. Both in TRT 2022.
In TRT 2023 this changes to Items 57 and 58.
Question # 3 – Difference between Trust and Net Income
Trust income is what the trust deed defines as income plus any income the trustee declares as income within their powers per the trust deed.
Net income is income as per s95 ITAA 1936.
Question # 4 – Proportionate v Quantum Approach
The proportionate approach does not apply to streamed capital gains and franked dividends.
Please listen in as this episode goes into a lot more depth than what we have listed here.
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Disclaimer: Tax Talks does not provide financial or tax advice. All information on Tax Talks is of a general nature only and might no longer be up to date or correct. You should seek professional accredited tax and financial advice when considering whether the information is suitable to your or your client’s circumstances.
Last Updated on 31 August 2023
Tax Talks spoke to Ron Jorgensen - Partner at Thomson Geer Lawyers - for more details.
