Managed Funds Distribution: Entering Discounted Capital Gains

Managed Funds Distribution: Entering Discounted Capital Gains

The following example illustrates how to enter a distribution from a Managed Fund that contains a Net Capital Gain that has been subjected to the discount method.

Depending on the source of the investment, the distribution statement may show either the grossed up value or the discounted value. Often the discounted value will be calculated on the assumption that the holder is an individual, which is not the same as being an SMSF. The tax treatment will be different and therefore it is best to enter the grossed up value.

In the following example a distribution of $2,000 has been received from a Managed Fund as Capital Gains- Discounted Method, where the investment company has applied the rate that relates to an individual.

The data entry should look as follows:

The $2,000 has been grossed up based on an individual?s tax treatment (50%) to $4,000. A Tax Exempt amount of -$2,000 needs to be entered - which balances the tax reconciliation and also satisfies the balance test on this form.

The Tax Reconciliation report is shown below. Effectively it zeros out the top section of the report and leaves the Taxable Capital Gains of $2,666.67.

Program and version

SuperFund, all versions