The following questions relate to capital gains tax. 1 Belvedere (Pty) Ltd, purchased a machine for...

 

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The following questions relate to capital gains tax. 1 Belvedere (Pty) Ltd, purchased a machine for R120 000. It has a tax value of R60 000 on the date it was sold, because tax allowances of R60 000 had been claimed. The machine was sold for R150 000. You are required to calculate the capital gain on this transaction. 2 Mr van der Merwe sold his farm to his family trust for R880 000. The market value of the farm on that date was R2 000 000. He had purchased the farm on 1 January 2002 for R1 000 000. No donations tax was payable. You are required to calculate the capital gain of Mr van der Merwe and state why there would be CGT liability in this scenario. (6) You are required to calculate Mrs George's taxable income, based on the above facts. (4) 3 Mr and Mrs George are married in community of property. Mrs George sold shares she inherited years ago from her father, and made a gain of R230 000. Her father's will provided that the shares shall not form part of the joint estate. She also sold a holiday house she had purchased out of the dividends received by her on the inherited shares. The gain made on the sale of the holiday house was R140 000. She had no other income for the year, other than dividends received of R130 000 (all from Republic shares). Mrs George had an assessed capital loss for the previous year of R9 000. (10) [20] The following questions relate to capital gains tax. 1 Belvedere (Pty) Ltd, purchased a machine for R120 000. It has a tax value of R60 000 on the date it was sold, because tax allowances of R60 000 had been claimed. The machine was sold for R150 000. You are required to calculate the capital gain on this transaction. 2 Mr van der Merwe sold his farm to his family trust for R880 000. The market value of the farm on that date was R2 000 000. He had purchased the farm on 1 January 2002 for R1 000 000. No donations tax was payable. You are required to calculate the capital gain of Mr van der Merwe and state why there would be CGT liability in this scenario. (6) You are required to calculate Mrs George's taxable income, based on the above facts. (4) 3 Mr and Mrs George are married in community of property. Mrs George sold shares she inherited years ago from her father, and made a gain of R230 000. Her father's will provided that the shares shall not form part of the joint estate. She also sold a holiday house she had purchased out of the dividends received by her on the inherited shares. The gain made on the sale of the holiday house was R140 000. She had no other income for the year, other than dividends received of R130 000 (all from Republic shares). Mrs George had an assessed capital loss for the previous year of R9 000. (10) [20]

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ANSWER 1 The capital gain on the machine would be R30000 R150000 R120000 R60000 2 The capital gain o... View the full answer