You are a registered tax practitioner at Experts in Tax and currently busy with the review of
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Question:
You are a registered tax practitioner at Experts in Tax and currently busy with the review of the taxable
income calculation prepared by one of your clients: Investprops Pty Ltd Investprops a South African
resident. Investprops owns investment properties from which rental income is earned. Investprops holds a
shareholding in Miniprops Pty Ltd Miniprops a South African resident.
Investprops supplied you with an extract of the items making up its incomeas they interpret it reflected
in the companys taxable income calculation for the year of assessment ending March
Extract from the taxable income calculation:
Income Amount Notes Additional information
Rental income received
from tenants
R
Amount received from
XP Pty Ltd
R XP Pty Ltd is one of Miniprops tenants and they
erroneously paid this amount into Investprops
bank account.
Dividends received R The R is the net amount of dividends
received of Rmillion from Miniprops and
dividends paid of R to Investprops
shareholders.
Leasehold improvements R Leasehold improvements were incurred by a tenant
in accordance with the lease agreement. The lease
agreement stipulated that improvements ofR
were to be effected. However, the tenant
incurred costs of R
Total R
REQUIRED:
Explain whether each amount should be included or not in Investprops Pty Ltds income
as defined in the Income Tax Act for the March year of assessment. No
calculations are required, but reasons should be provided in your discussion. You do not
need to refer to any case law.
The mark allocation for each item is provided below:
Item Marks
Rental sales from tenants
Amount received from XP Pty Ltd
Dividends received
Leasehold improvements
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date: