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Trust Capital Gain (Carry forward capital loss) but overall loss

riz
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riz
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Trust Capital Gain (Carry forward capital loss) but overall loss

Hello,

 

I am working on a client with two trusts. 

 

One is a property trust who has made a loss but sold properties and there is a capital gain. Both of this have been distributed to a discretionery trust. We are using MYOB AE tax and there is no issue. 

 

But in the tax return of the discretionery trust there is V335 error saying net losses cannot be distributed accross trusts. The net capital gain is zero because capital lossess have been carry forwarded. But as a result the system is creating error as the overall effect is only the loss from the property trust.

 

Anybody has any explanation?

 

 

1 REPLY
MYOB Staff Post Helen-Z
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MYOB Staff Post
Australia
Helen-Z
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2Solutions

Re: Trust Capital Gain (Carry forward capital loss) but overall loss

Hello @riz

 

Thanks for your post, and welcome to the MYOB Community Forum - I hope you find it helpful!

 

With validation errors, I find it can be really helpful to check our online Help area - in the return go to the menu option Help > Lodgment V messages and search for the V335 error to find further information about the error.

 

Looking at the explanation of the error, I can see the following:

 

The sum of :

Primary production share of net income from trusts (Item 8 Label Z)
+ Non-primary production share of net income from trusts (Item 8 Label R)
+ non-primary production franked distributions from trusts (Item 8 Label F)
+ net capital gain (Item 21 Label A)
+ attributed foreign income (Item 22 Labels M, U, X) 

+ other assessable net foreign source income (Item 23 Label V)
+ Australian franking credits from a NZ franking company (Item 23 Label D)

 

is less than zero which indicates that an overall trust loss is being distributed between trusts. Adjust distributed amounts at Item 8 Labels Z, R and F until the overall negative amount no longer exists (i.e. make the sum equal to zero).

 

If the result of the calculation is less than zero, then the validation error is correct for the second return. Most likely the result of that same calculation for the first return would have a result that is not less than zero, and so it did not trigger the validation error.

 

The validation error also makes a suggestion on how to resolve the error - Adjust distributed amounts at Item 8 Labels Z, R and F until the overall negative amount no longer exists (i.e. make the sum equal to zero).

 

If you need further assistance with the return, please give our support team a call on 1300 555 666.


Regards,

Helen
Tax Support Specialist
MYOB Australia Pty Ltd
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