TAXATION 2B QUESTION 1 (30 MARKS) Daemon Steven is employed by an insurer to sell life insurance policies. He earns a fixed salary of R440 000 a year. He does not earn commission. During the 2023 year of assessment, Daemon also earned R400 000 in his spare time as a freelance computer programmer which was part of his business income. He had earned the following additional income for the year of assessment: R Rental income for a flat on rent 15 000 p/m Interest income on a fixed deposit at a South African bank 264 600 Casino winnings 150 000 Daemon is not a vendor or registered as a micro business and incurred the following expenses during the 2023 year of assessment to promote his computer programming activities, he had the necessary documentation to indicate that these expenses were incurred in the production of his income: R Annual membership fee at the local squash club 24 000 Drinks and snacks at the club with other members (including Daemons own costs of R4 000) 21 000 Ballpoint pens advertising his computer-programming services, presented to fellow squash players 3 000 Daemon has been conducting his computer programming business from his home since 1 July 2022. His office at home occupies 10% of the total floor area of his home. He also uses the television room (which occupies 5% of the floor area) as an office during the day. Both rooms have been specifically equipped for business purposes. He incurred the following expenses during the 2023 year of assessment on his home: R Mortgage bond repayments (R23 000 per month relating to capital repayments) 40 000 p/m Cleaning and maintenance 60 000 New built-in cupboards installed in his office at home 40 000 Electricity, water and rates 66 000 Telephone (80% of its use being for his business). The Commissioner accepts this apportionment as being reasonable in terms of section 23(g) 17 600 Computer equipment purchased on 1 July 2021, which was brought into use immediately. (The acceptable write-off period of the equipment is three years.) 112 500