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10 Jun 11 On electronic tax return preparation software

MEMBER 94 writes:

“Two particularly annoying issues with the most commonly used ATO approved electronic tax return preparation software.

  1. Every company tax return that is lodged electronically has an Electronic Lodgment Declaration form. This shows a figure at the top of the page for total income for the year which is never the correct total income that is shown in the body of the tax return. Why is it that this figure always wrong? It must be set up to add in our wrong amounts that are not income.
  2. For trust returns: If a trust has a trading loss and a taxable capital gain the share of the trading loss must be shown in each beneficiary’s individual tax return and the gross amount of the capital gain without offsetting the loss in the trust is shown in each beneficiary’s individual tax return. The same happens when there is a primary production loss and a non-primary production profit in the trust. Trusts cannot distribute losses to beneficiaries, the losses should be netted off against any other profit or gain and only the net balance can be distributed by the trust. Why are we forced to show these losses incorrectly in clients’ individual tax returns?

We have mentioned these issues a number of times over many years to our software supplier (the one most commonly used by tax agents) and they just say it is the ATO specifications and they cannot make any changes to correct these issues. Companies and trusts are quite common in Australia so why have these issues with the ATO tax return specifications that have existed for many years not been fixed?”