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Hi all, newbie here. I would like your advise on this:
Me and friends set up Trust account to purchase IP. We have equities in our own accounts. For taxation purpose, would it be tax deductible if we were to transfer our equity $ to the TRUST Account for the deposit of our IP?
Thanks.
You can't transfer equity. You can either
1. loan money to the trustee (if it is not yourself)
2. settle money on the trust (ie gift).
Neither are tax deductible. If you lend money to the trust and charge interest you may be able to claim any interest you incur - and this will be income to the trust - if the rates are commercial.
You can't transfer equity. You can either
1. loan money to the trustee (if it is not yourself)
2. settle money on the trust (ie gift).
Neither are tax deductible. If you lend money to the trust and charge interest you may be able to claim any interest you incur - and this will be income to the trust - if the rates are commercial.
Terry,
The OP said "set up a trust account".
This just suggests a joint venture (which itself could amount to a partnership at general law or tax law etc. but that is another issue without given facts) where an account is merely an operating account with requirements to trace individual contributions and benefits.
Or the term "trust account" could have been used in a way not understood by the OP.
Can't really generalise with so few facts.
it's a Trust Deed where we set up trust account for IP purpose.I took it to mean set up a formal trust under a deed, but could be wrong. Many use the phrase in this way.
Op can you elaborate please?
it's a Trust Deed where we set up trust account for IP purpose.
Its not a 'trust account' but a 'trust'.
What sort of trust is it?
Discretionary
From my understanding, we can claim 100% of our spending in the name of Trust.