QUESTION $1(30$ marks, $60$ minutes$)$

John Snow $("$John$")(45$ years old$)$ was married in community of property to Karen Snow $("$Karen$")(30$ years old$)$ for $10$ years until the couple divorced on $1$ November $2024.$ Both are South African residents.

Property

Prior to the divorce, the couple lived in their home in Johannesburg, which they bought on $2$ January $2014$ for R$1400000.$ To cover this purchase price, they took out a bond with First Regional Bank $($FRB$),$ for which they paid R$15400$ monthly. Of this, $50\%$ went towards capital, and the other $50\%$ went towards interest. The bond registration fee was R$10500.$ The monthly rates and taxes for the house are R$4000,$ covering electricity, water, and waste disposal as well.

John's employment

John is employed as a business development director for Serve IT $($Pty$)$ Ltd an IT consulting company that provides software as a service and his work requires him to identify potential clients, establish relationships, prepare proposals, and meet with prospective clients. His monthly remuneration package for the current year of assessment was structured as follows:

$\backslash$table$[[,$R$],[$Salary$,100000],[$Cell phone allowance,$5000],[$Travel allowance $($Note $1),10000],[$Employer contribution to medical aid $($Note $2),4000]]$

Note $1$: John kept an accurate logbook and travelled a total of $50000$ km for the $2025$ year of assessment, $10000$ of which were for business. He drove a $2015$ Land Rover Freelander, which he acquired for R$350000($including VAT$).$ He spent R$78000$ on fuel during the year, the car service cost was R$12000.$ He kept records of all expenses related to the car.

Note $2$: John is the main member of BeWell Medical Aid Scheme, with Karen being the sole dependent. He paid R$3000$ per month towards the medical aid throughout the year, even after the divorce Karen was still listed as a dependent on the medical aid.

Karen's baking business

Because John was very busy, when they married, the couple decided that Karen would stay at home as a housewife. She started baking as a hobby during lockdown, and as her posts on Instagram and Tiktok became popular, she started getting orders from her followers to bake for special occasions. As a result in November $2020,$ the couple agreed to extend the garage $($at a cost of R$500000)$ to create space for Karen's baking business operating as a sole proprietor. The business commenced on $2$ January $2021$ and occupies approximately $10\%$ of the total square meter area of the house.

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Below are the income and expenses of her baking business for the past five years:

$\backslash$table$[[$Karen $-$ Schedule of income and expenses,$2025,2024,2023,2022,2021],[$Cake sales,$20000,15000,12000,10000,5000],[$Baking ingredients $-$ purchased,$(20000),(20000),(18000),(25000),(10000)],[$Baking ingredients $-$ not used,$4000,1000,2500,4000,2000],[$Attending a cake decorating workshop,$(10000),,-,-,(8000)],[$Garage extension,$-,$;$,-,$;$,(50000)],[$Baking equipment,.,$-,-,-,(30000)],[$Consumables $-$ used in full,$(6000),(5000),(3000),(2500),(4000)],[,,,,,],[$Profit$/$Loss$,(12000),(9000),(6500),(13500),(545000)]]$

Sale of property

After the divorce the couple sold the house on $30$ November $2024$ for R$5000000$ through Vuka Property Agents $($Pty$)$ Ltd$,$ a registered agent and VAT vendor. Karen stopped baking during this time bec she had to move out of the house. The agent's commission was $10\%$ of the selling price, excl When going through their paperwork to establish the costs associated with the house, the co an old invoice from June $2021$ relating to $R{r}^{\text{~}}$ repairing and painting the roof heavy storm.

In November $2024,$ Vuka Property Agents $($Pty$)$ Ltd advised them to do some basic landscaping to make the property more attractive for prospective buyers. They spent R$80000$ on tree felling, garden design,

Karen's baking businessBecause John was very busy, when they married, the couple decided that Karen would stay at home asa housewife. She started baking as a hobby during lockdown, and as her posts on Instagram and Tiktokbecame popular, she started getting orders from her followers to bake for special occasions. As a resultin November $2020,$ the couple agreed to extend the garage $($at a cost of R$500000)$ to create space forKaren's baking business operating as a sole proprietor. The business commenced on $2$ January $2021$and occupies approximately $10\%$ of the total square meter area of the house.Below are the income and expenses of her baking business for the past five years:Karen $-$ Schedule of income and expenses$|$Cake salesBaking ingredients $-$ purchasedBaking ingredients $-$ not used$|$Attending a cake decorating workshopGarage extension$|$Baking equipment$|$Consumables $-$ used in fullProfit$/$LossSale of propertyPage $3$ of $8$Additional information:$202520000(20000)$REQUIRED:$4000(10000)(6000)(12000)202415000(20000)1000202312000(18000)2500202210000$Assume that SARS allows kitchen equipment to be writte