The Lesley family trust distributes income for the year to the following beneficiaries: Debbie: Net...
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The Lesley family trust distributes income for the year to the following beneficiaries: Debbie: Net capital gains $2,500; Franked dividends $3,500 = Total $6,000 Peter: Interest income $600; Franked dividends $200 = Total $800 Debbie and Peter are specifically entitled to each of the amounts allocated to them by the trustee. Debbie chooses to receive her distribution in cash. Peter decides to leave his distribution in the trust to accumulate. Which of the following statements in relation to the character of the income is CORRECT? Select one:
Debbie will be able to offset any capital losses she has against the capital gain received from the trust.
The franking credits attaching to the franked dividends will be lost once the dividends are distributed.
The capital gains made in the trust can be offset against capital losses incurred by the trust, but cannot be offset against any capital losses the beneficiaries may have.
Peters $800 distribution will not be assessable as he has elected not to receive it.
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