Trust Distribution

[Christopher Singley]

On Thu, Oct 14, 2010 at 8:19 AM, Alex Hill <alex_hill at arach.net.au> wrote:

> The trust, and kids are located in Australia and is considered a discretionary trust. Basically the only obligation is to distribute income to the beneficiaries at the end of the year.

Sadly, my knowledge of Commonwealth trust and tax law is not what it could be.

What is the nature of the obligation?  Is it simply that you avoid
entity-level income tax if all the trust income is distributed
annually?

If so, then this is not a liability, and its payment is not an
expense.  Don't reduce trust profits by the amount of distributions.
These are distributions of equity.