TAX2601 Assignment 1 (COMPLETE ANSWERS) Semester 1 2026 - DUE 8 April 2026; 100% Correct solutions and explanations.

TAX2601 Assignment 1 (COMPLETE ANSWERS) Semester 1 2026 - DUE 8 April 2026; 100% Correct solutions and explanations. Question Marks 1 Minutes 32 16 Total 38 58 70 TAKE NOTE that you must complete and submit ALL the questions. However, Unisa will mark only certain questions, while others are designated for self-assessment. Only the marked question/s will contribute to your year mark. You will be provided with solutions for all the questions, along with detailed feedback. The decision regarding which question/s are marked and which are for self-assessment is final, and no further correspondence on this matter will be entertained. 1. Instructions: • You may write or type your answers; however, they must be uploaded to myUnisa as ONE document in PDF format. • Start each question on a new (separate) page and number the questions clearly. • This assessment will contribute 40% towards your year mark. • You are REMINDED that the answers you submit must be your own work, reflecting YOUR understanding of taxation. Group efforts or assistance from others are not allowed. If you are part of a tutor group, DO NOT discuss the assessment in class – complete it independently to avoid any allegations of plagiarism. Any indication of academic misconduct will result in a 0% mark for the assessment. • Do not wait until the last moment to submit your answers. It is advisable to complete and submit your assessment a day or two before the deadline to avoid issues such as running out of data, power outages or system failures. • After submission, confirm that you have uploaded the correct document. • Show all workings, where applicable. If an amount is subject to a limitation, clearly indicate how the limitation has been applied. If an item is exempt from tax or not allowable as a deduction, state this clearly and provide a brief explanation. All amounts must be rounded to the nearest Rand. 2. Assumptions when answering the questions: • All amounts exclude VAT unless stated otherwise. • All persons mentioned are residents of the Republic of South Africa unless stated otherwise. • You must ignore all capital gains tax consequences for purposes of this assessment. • SARS = South African Revenue Service Page 2 of 6 TAX2601/2026/S1/ Assessment 1 Page 3 of 6 QUESTION 1 (13 marks, 16 minutes) Dzindu Properties (Pty) Ltd (Dzindu) is a South African resident company that builds and sells residential houses in and around Vhembe (Limpopo Province). The company’s financial year ends on 30 March. During a severe rainstorm in the area in November 2025, a river broke its banks and washed away several recently finished houses that were in the market for sale. The properties were totally destroyed. The development cost of the destroyed properties amounted to R2 700 000 in total. On 20 January 2026, Dzindu’s insurance company paid a total amount of R2 000 000, in full and final settlement, to Dzindu to indemnify the company for this loss. REQUIRED MARKS Discuss whether the expenditure/losses above are deductible by Dzindu Properties (Pty) Ltd in terms of the general deduction formula (section 11(a) read with section 23) for the year of assessment ending 30 March 2026. (You need to specify amounts in your discussion.) Note: • You can support the main issue in the question with relevant case law from the module's prescribed case law. • List all the requirements of the general deduction formula but note that most marks are awarded to the discussion of the requirements and the main issue in the question. 13 QUESTION 2 (13 marks, 16 minutes) Sokhaya Stores (Pty) Ltd is a company resident in South Africa. The company trades in cleaning materials. The company is not a small business corporation as defined in the Income Tax Act. Its financial year ends on 31 March 2026. You have the following information: Year of assessment Taxable income Date of assessment 2023 R August R September R April R3 800 000 Estimated – not yet assessed REQUIRED MARKS a) Calculate the first provisional tax payment for Sokhaya Stores (Pty) Ltd for its 2026 year of assessment to ensure that the company does not incur any underestimation penalties. b) Calculate the second provisional tax payment for Sokhaya Stores (Pty) Ltd for its 2026 year of assessment to ensure that the company does not incur any underestimation penalties. Note: • Provide a reason for all the amounts used, explaining whether they may be used as the basic amount, and specify any adjustments made (if any) in calculating the basic amount. 9 4 TAX2601/2026/S1/ Assessment 1 QUESTION 2 (continued) • Clearly indicate on which date the payments must be made. • The answer must be presented in the format explained below. Answers presented in a written paragraph or discussion format will not be considered or marked. First / second provisional tax payment -Date of payment: Year of assessment Reason QUESTION 3 (32 marks, 38 minutes) Bata Thabo