When their grandad died, Ross and Lila (brother and sister), each received a 50% ownership of their grandads Mosman property in NSW. Ross and Lila immediately started renting it out. During the 2019/20 income year, they received a total of $110,000 in rental income.

Because Ross is unemployed, they agree that Ross will receive a salary of $35,000 for managing the property, plus that he will receive 75% of the remaining net income.

Lila who earned salary payments of $165,000 from her work as a professor, will only receive 25% of the remaining net income. Lila also had deductions of $5,000 for her academic work.

QUESTION:

(a)Calculate the s90 PNI

(b)Prepare a Distribution Statement

(c)Calculate each partners assessable income

(d)Calculate each partners taxable income

TAXATION LAW AUSTRALIA