Your assumptions regarding income vs expenses is correct. One is used to offset the other.
Think of the trust as just another person in this respect. It has income, it has expenses. Tax or gearing benefits is allocated on the difference.
The one thing with trusts is the profits must be...
I don't think you completely understand how negative gearing works and how family trusts work. You can't negatively gear via an asset in a family trust.
The 'losses' incurred will be retained in the trust until it makes a profit, at which point the losses will offset the profit and reduce...
