Jamie Nigel (a South African resident) retired on 30 September 2020 at the age of 65 years from his employer (Incredible Foods (Pty) Ltd) by whom he was employed for the past 30 years. Jamie is married out of community of property, without the accrual system. Jamie retired from his retirement annuity fund on 30 September 2015 (at the age of 60 years) and received a lump sum payment of R900 000 from the fund. He used R600 000 of the lump sum to buy a 45% interest in a partnership. He did not sell his interest in the partnership when he retired from employment on 30 September 2020. He is now involved in the partnership on a full‐time basis. The preliminary taxable income of the partnership was R735 800 for the period 1 March 2020 to 28 February 2021. The following amounts were considered in calculating the R735 800 preliminary taxable income of the partnership: Interest received from surplus funds invested in a SA bank account R82 600 Bad debts written off (Note 1) (R12 900) Donation made to a PBO (the s18A certificate was obtained) (R16 000) Medical aid fund contributions paid by the partnership (Note 2) (R45 000) Additional information: Note 1 – The bad debts relate to sales that were made before Jamie became a partner of the partnership. Note 2 – The partnership paid Jamie’s monthly contributions of R3 750 from 1 October 2020. The balance of the contributions paid by the partnership relates to the medical aid fund of the other partner. Required:
Q.2.1	Calculate the impact of the information relating to the partnership only on the taxable income of Jamie for his 2021 year of assessment. Start your calculation with the partnership’s taxable income of R735 800.	(15)

Answer rating: 100% (QA)

The partnership comprised of two or further members arent a taxable reality The Internal Revenue Service recognizes hookups as passthrough realities established with mate benefactions of plutocrat and ... View the full answer