Presh Naidoo is busy completing his income tax return for the current year of assessment. He is

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Question:

Presh Naidoo is busy completing his income tax return for the current year of assessment.

He is a sole proprietor who programmes and repairs computers for a living.

1. On 5 March 2020, Presh received R15 000 for a repair job he performed on 23 February 2020. (2 marks)

2. Presh went to America to visit his brother in July 2020. While he was there, he fixed a few computers and earned the equivalent of R32 500. (3 marks)

3. Presh sold his personal computer to a friend for R18 500 during the 2021 year of assessment. The market value of the computer was R50 000 on the date of sale. (5 marks)

4. On 28 November 2020, Presh made a deal with a client that he would write some programme codes for the client’s computer. In lieu of payment the client agreed to donate a printer to the value of R10 000 and a HD Screen to the value of R16 000 to Presh. (3 marks)

5. Presh heard about the profits one could make purchasing IT (Information Technology) shares on the JSE. He started buying shares from 1 January 2020. He intended to hold on to the shares until they doubled in value and then he would sell them. On 1 April 2020, 15 July 2020 and 28 February 2021 he sold a total of 50% of his share portfolio for R210 000. He made a profit of R105 000. (2 marks)

Required: Q.2.1 Advise Presh on whether or not the above itemsshould form part of his grossincome for the year ended 28 February 2021. Include reasons for your inclusion or exclusion of these amountsin grossincome and refer to the requirements of the ‘grossincome’ definition.