Write short written responses to questions:

12.1

12.2

12.3

12.6

12.1 12.2 Short Answer Questions 1-5. Answer the following questions. When is a partnership income tax return required and not required? What is the relevance of a partnership agreement in preparing a partnership income tax return? How are partner's salaries treated for income tax? What are the restrictions on when they can be paid? What is required when a partner sells their interest in a partnership? How is tax calculated on uncontrolled partnership income? 12.3 12.4 12.5 12.6 . . (Identification of partnership) The following are resident taxpayers: Walt and Skyler operate a car wash. Veronica derives gross fees of $200,000 from her practice as a barrister. In order to minimise income tax paid by her family, Veronica pays her husband a salary of $100,000. Sansa and Arya are sisters who jointly own shares from which they receive franked dividends each year. Hammer and Tongs (who are not related) own neighbouring townhouses at Beachtown, which they independently make available for holiday lettings. After receiving an attractive offer from a large family, they agree to lease the two properties for a period of 8 weeks. Celeste and Pheobe own a rental property which they lease to tenants. The Drizabone Golf Club consists of 25 members who all live in Drizabone. The members contribute capital each year to maintain the golf course and a small clubhouse and the Club operates on a not for profit basis. Shrewd and Co, accountants, sign an agreement whereby they will refer as many of their clients as possible to Downright, Dodgy and Co. investment advisors, who will in return utilize Shrewd and Co. to attend to all of their investors' income tax returns. . . For each of the above, indicate whether the s.995(1) definition of a partnership is met. For each situation where a partnership exists, state whether a partnership tax return is required