The Carter Family Trust is a discretionary trust with net income of $120 000 for the current income year. The trustee has resolved to distribute one quarter of the net income to Hugh (16 years old) and the remaining amount to Anita (31 years old). Hugh holds a part-time job at McDonalds and has earned $8000 in salary income for the current income year.

Which of the followings statements is most correct?

Select one:

1.

The net income of $120 000 is calculated according to s 91 ITAA 36.

2.

Hugh will not be required to lodge a tax return.

3.

The trustee will be assessed on $30 000 under s 99 ITAA 36.

4.

The trustee will be assessed on $30 000 under s 98(1) ITAA 36.

5.

Anita will be assessed on $60 000 under s 97 ITAA 36.