Assessing asset attribution 043-04060010

The entity has $100,000 attributable entity assets derived from entity assets of a $50,000 share portfolio and a $130,000 rental unit and entity liabilities of an $80,000 bank loan secured solely against the rental unit.

None of the assets or liabilities involve primary production or a controller's home property. Attribution has been determined as 50% to Anne and 50% to Bob.

Anne:

• calculate attributable entity assets of the entity: $100,000
• no genuine investors in the entity: Nil
• 50% of the entity's attributable entity assets are attributed to Anne:

$100,000 x 50% = $50,000

Attribution assets for Anne = $50,000

Bob:

• calculate attributable entity assets of the entity: $100,000
• no genuine investors in the entity: Nil
• 50% of the attributable entity assets are attributed to Bob:

$100,000 x 50% = $50,000

Attribution assets for Bob = $50,000

The entity has $100,000 attributable entity assets derived from entity assets of a $50,000 share portfolio and $130,000 rental unit and entity liabilities of an $80,000 bank loan secured solely against the rental unit.

None of the assets or liabilities involves primary production or a controller's home property. Attribution has been determined as 50% to Andrew and 50% to Beryl.

Genuine investor:

• the historical value of the capital injection was $20,000
• attribute this amount to genuine investor

Attribution assets for genuine investor = $20,000

Andrew:

• calculate attributable entity assets of the entity: $100,000
• the historical value of the capital injection was $20,000
• deduct any genuine investor amounts: $100,000 - $20,000 = $80,000
• 50% of the entity's attributable entity assets are attributed to Andrew:

$80,000 x 50% = $40,000

Attribution assets for Andrew = $40,000

Beryl:

• calculate attributable entity assets of the entity: $100,000
• the historical value of the capital injection was $20,000
• deduct any genuine investor amounts: $100,000 - $20,000 = $80,000
• 50% of the entity's attributable entity assets are attributed to Beryl:

$80,000 x 50% = $40,000

Attribution assets for Beryl = $40,000

Entity A net asset value is $50,000 (attributable assets)

Entity B:

• has net asset value of $200,000 (attributable assets)
• entity B is attributed with 50% of entity A's assets: 50% x $50,000 = $25,000
• attributable entity assets of Entity B are therefore $225,000 ($200,000 + $25,000)
• historical value of the capital injection by Marco (genuine investor): $80,000
• Johann is attributed with 40% control of Entity B
• assets attributed to Johann are ($225,000 - $80,000) x 40% = $58,000

Entity C:

• has net asset value of $90,000 (attributable assets)
• entity C is attributed with 60% of entity B 's assets: 60% x ($225,000 - $80,000) = $87,000
• attributable entity assets of Entity C are therefore $177,000 ($90,000 + $87,000)
• Renae is attributed with 100% control of Entity C

Johann

Johann has 40% control of Entity B. This is the only direct investment. To calculate the attributable assets, determine how much of Entity A is attributable to Entity B.

Entity A

• calculate attributable entity assets of Entity A: $50,000
• no genuine investors in Entity A
• 50% of Entity A's attributable entity assets are attributed to Entity B: $50,000 x 50% = $25,000

Entity B

• calculate attributable entity assets of Entity B: $225,000
• deduct any genuine investor amounts: $225,000 - $80,000 = $145,000
• 40% of Entity B's attributable entity assets are attributed to Johann: $145,000 x 40% = $58,000

Attribution assets for Johann = $58,000

Renae

Renae has 100% control of Entity C. This is the only direct investment. To calculate the attributable assets, determine how much of Entity A is attributable to Entity B, and then how much of Entity B is attributable to Entity C.

Entity A

• calculate attributable entity assets of Entity A: $50,000
• no genuine investors in Entity A
• 50% of Entity A's attributable entity assets are attributed to Entity B: $50,000 x 50% = $25,000

Entity B

• calculate attributable entity assets of Entity B: $225,000
• deduct any genuine investor amounts: $225,000 - $80,000 = $145,000
• 60% of Entity B's attributable entity assets are attributed to Entity C:
• $145,000 x 60% = $87,000

Entity C

• calculate attributable entity assets of Entity C: $177,000
• no genuine investors in Entity C
• 100% of Entity C's attributable entity assets are attributed to Renae:
• $177,000 x 100% = $177,000

Attribution assets for Renae = $177,000