Trust Distribution

[Alex Hill]

I guess technically there is no obligation to distribute at all, but that 
goes against the idea of the trust (tax reduction). That said, as a 
beneficiary myself, being the sole trustee and being a discretionary trust, 
I could choose to allocate the profits completely to myself, but once again 
missing the point of the trust.

I am thinking that equity might be the way to go, and use liabilities in the 
interim if I miss a montly payment for one reason or another.

Cheers,
Alex
----- Original Message ----- 
From: "Christopher Singley" <csingley at gmail.com>
To: "Alex Hill" <alex_hill at arach.net.au>
Cc: "Thomas Bullock" <tbullock at nd.edu>; <gnucash-user at gnucash.org>
Sent: Thursday, October 14, 2010 9:29 PM
Subject: Re: Trust Distribution


> 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.
>