QUESTION $1($continued$)$

REQUIRED MARKS

$($a$)$ For transaction $1,$ discuss whether the payment of R$102000$ made to Easy Elevators $($Pty$)$ Ltd qualifies as a deductible expense in terms of the general deduction formula $($section $11($a$)$ read with section $23)$ for RentCo $($Pty$)$ Ltd$.$

You can ignore case law.

$8$

$($b$)$ Calculate and clearly indicate the effect $($deductible$/$taxable$)$ of transactions $1$ to $7$ on RentCo $($Pty$)$ Ltd$$s taxable income for the $2024$ year of assessment.

You need to provide reasons for your calculations$/$answers to transactions $6$ and $7.$

You may assume that RentCo $($Pty$)$ Ltd will make any election in terms of provisions of the Income Tax Act to legally minimise their tax liability and you may ignore any capital gains tax consequences.

$35$

$($c$)$ For this part, assume that RentCo $($Pty$)$ Ltd is in fact a small business corporation as defined and that its taxable income $($correctly calculated$)$ amounted to R$480000$ for the $2024$ year of assessment after taking transactions $1$ to $7$ into account, but before taking transaction $8$ into account.

Calculate the normal income tax liability of RentCo $($Pty$)$ Ltd for the year of assessment ended $31$ March $2024.$

$7$

REQUIRED MARKS

$($a$)$ For transaction $1,$ discuss whether the payment of R$102000$ made to Easy Elevators $($Pty$)$ Ltd qualifies as a deductible expense in terms of the general deduction formula $($section $11($a$)$ read with section $23)$ for RentCo $($Pty$)$ Ltd$.$

You can ignore case law.

$8$

$($b$)$ Calculate and clearly indicate the effect $($deductible$/$taxable$)$ of transactions $1$ to $7$ on RentCo $($Pty$)$ Ltd$$s taxable income for the $2024$ year of assessment.

You need to provide reasons for your calculations$/$answers to transactions $6$ and $7.$

You may assume that RentCo $($Pty$)$ Ltd will make any election in terms of provisions of the Income Tax Act to legally minimise their tax liability and you may ignore any capital gains tax consequences.

$35$

$($c$)$ For this part, assume that RentCo $($Pty$)$ Ltd is in fact a small business corporation as defined and that its taxable income $($correctly calculated$)$ amounted to R$480000$ for the $2024$ year of assessment after taking transactions $1$ to $7$ into account, but before taking transaction $8$ into account.

Calculate the normal income tax liability of RentCo $($Pty$)$ Ltd for the year of assessment ended $31$ March $2024.$

$7$