Tax treatment on holding costs incurred prior to and during construction of a rental property


CGT of the house bought by the estate

A husband passed away in 1985 and left his wife a house, House 1, to live in. Later, in 1989, the wife sold House 1 to buy a new house, House 2. In 1996, she wanted to move back to Sydney and buy another house, House 3. However, there wasn't enough money, so the executors of the husband's estate let their son A buy a part of House 3. The estate bought the rest, and the wife and son lived there. They signed a legal agreement, called a deed of family arrangement, to document this.

Who will pay taxes on the income referable to the estate?

Q: A husband passed away, leaving a sizable estate. His wife, also a US citizen, was the executor and the initial sole beneficiary. However, due to US tax law concerns, it was decided she shouldn't receive all the assets. With her agreement, their three adult children sought court orders to receive a piece of income-generating real estate from the estate.

Case 2 - Deceased Estates

Client: My client had properties in his name and also in a trust. He passed away and left these properties to his three children according to his will. For tax and business reporting purposes, we've set up an estate for the properties he owned personally and a family trust for the ones in the trust. We've already submitted tax returns and BASs for the estate and trust up to September 30, 2016. But now, the children have moved all the properties into their own names as per the will. Here are my questions:

Deceased Estates

Q: My client recently passed away and left his investment properties to his three children as stated in his will. However, there's a condition: the income from these properties must be shared among his three children and eight grandchildren for the next 15 years. Can we create a trust to manage this income distribution evenly among the 11 beneficiaries over the next 15 years?

Asset income of the deceased estate

Q: A client passed away in the 2016 financial year. We're sorting out their taxes for that year and need advice on how to handle income from their assets after their death. They owned commercial properties with their wife, but we're not sure if they owned them as joint tenants or tenants in common. If it's joint tenants, does the property automatically go to the surviving spouse? Do we need to file an estate tax return? What if the property hasn't been officially transferred yet? Can a family trust give income to a deceased estate?

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