New Zealand tax,a number of statements (independent of eachother) are presented which relate to...New...

70.2K

Verified Solution

Question

Accounting

New Zealand tax,
a number of statements (independent of eachother) are presented which relate to a particularscenario. For each of the statements, specify whether it isTRUE or FALSE , and justify your answer withan appropriate explanation (in no more than 150words). All persons mentioned below are New Zealand taxresidents unless specifically stated otherwise. All taxpayers havea 31 March balance date.
a) Apple Family Trust holds investments in amulti-rated Portfolio Investment Entity (MRP) and the trustees havechosen 28% as its Portfolio Investor Rate (PIR). The attributedincome from the MRP when distributed to the beneficiaries must beincluded in the beneficiary’s income tax return.
TRUE/FALSE?
b) Bana is 55 years old and would like toretire in 10 years’ time. He has invested in the sharemarket,holding a portfolio of shares in different New Zealand companies.On the whole, the shares yield good dividends. However, not happywith the performance of one of the companies in which he hasinvested, Bana sold the shares and made a loss. For tax purposes,Bana can claim a deduction for the losses made.
c) Kerry, a limited partner, owns a 50%interest in the KK Limited Partnership which was formed on 1 April2016. Kerry contributed capital of $75,000. For the year ended 31March 2017, the partnership reports a $40,000 loss and distributes$4,000 to Kerry. Kerry’s partner’s basis at the beginning of 1April 2017 is $51,000.
TRUE/FALSE?
d) During the year ended 31 March 2017, LuckeeLtd has the following dividends:
- From unassociated New Zealand resident companies: $7,200(net)
- From a New Zealand resident company in which Luckee Ltd has a 66%shareholding: $3,600 (net)
- From a New Zealand resident company in which Luckee Ltd has a100% shareholding: $14,400 (net)
All dividends are fully imputed. The figures given are the amountof dividends declared by the companies. The amount of Luckee Ltd’sgross dividend that is taxable in 2016-17 is $35,000.

Answer & Explanation Solved by verified expert

4.5 Ratings (651 Votes)

Question a True If the trustees have chosen either 0 105 175 or had the default rate applied as the PIR for the trust28 The income attributed by the PIE will not be excluded income and will need See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

In: AccountingNew Zealand tax,a number of statements (independent of eachother) are presented which relate to...New Zealand tax,a number of statements (independent of eachother) are presented which relate to a particularscenario. For each of the statements, specify whether it isTRUE or FALSE , and justify your answer withan appropriate explanation (in no more than 150words). All persons mentioned below are New Zealand taxresidents unless specifically stated otherwise. All taxpayers havea 31 March balance date.a) Apple Family Trust holds investments in amulti-rated Portfolio Investment Entity (MRP) and the trustees havechosen 28% as its Portfolio Investor Rate (PIR). The attributedincome from the MRP when distributed to the beneficiaries must beincluded in the beneficiary’s income tax return.TRUE/FALSE? b) Bana is 55 years old and would like toretire in 10 years’ time. He has invested in the sharemarket,holding a portfolio of shares in different New Zealand companies.On the whole, the shares yield good dividends. However, not happywith the performance of one of the companies in which he hasinvested, Bana sold the shares and made a loss. For tax purposes,Bana can claim a deduction for the losses made.c) Kerry, a limited partner, owns a 50%interest in the KK Limited Partnership which was formed on 1 April2016. Kerry contributed capital of $75,000. For the year ended 31March 2017, the partnership reports a $40,000 loss and distributes$4,000 to Kerry. Kerry’s partner’s basis at the beginning of 1April 2017 is $51,000.TRUE/FALSE? d) During the year ended 31 March 2017, LuckeeLtd has the following dividends:- From unassociated New Zealand resident companies: $7,200(net)- From a New Zealand resident company in which Luckee Ltd has a 66%shareholding: $3,600 (net)- From a New Zealand resident company in which Luckee Ltd has a100% shareholding: $14,400 (net)All dividends are fully imputed. The figures given are the amountof dividends declared by the companies. The amount of Luckee Ltd’sgross dividend that is taxable in 2016-17 is $35,000.