TAX2601 ASSIGNMENT 5 SEMESTER 1 OF 2022

Max Style (Pty) Ltd TAX2601 ASSIGNMENT 5 SEMESTER 1 OF 2022 Taxable income
R
Starting Taxable income 4 165 000,00



Allowance - Manufacturing machine Alpha (136000*20%) - 27 200,00
Allowance - Manufacturing machine Beta (225 000+8500) *40% - 93 400,00
Allowance - Manufacturing machine Delta (144 500*20%) - 28 900,00
Allowance -Catering equipment – Small assets - 6 200,00
Allowance -Computer equipment (200 000/3*5/12) - 27 777,78
Allowance - office equipment (45 000/6*3/12) - 1 875,00
Allowance - Manufacturing machine Gamma (67000*20%) - 13 400,00



Machine Gemma:
Selling price limited to Cost 3 500,00
Less tax base (67000-(67000*20%*4) - 13 400,00
S 11 0 Scrapping allowance - 9 900,00


Capital Gain/Loss
Proceeds 3 500,00
Less base cost (67 000-(67000*20%*4) - 13 400,00
Allowance -factory building KZN1(2000 000+180 000)*5% - 109 000,00




Repair deduction for the factory roof fixed - 36 000,00

Allowance KZN 2 Factory building (3200 000*5%) - 160 000,00



Recoupment calculation - KZN 1 1 800 000,00
Selling price ltd to cost - 971 000,00
Less tax base 829 000,00
Recoupment 41 450,00




Cost 2 180 000,00
Less total allowances - 1 209 000,00

CGT:
Proceeds 1 758 550,00
Less base cost - 971 000,00
Capital gain 787 550,00
Taxable capital gain 315 020,00

Interest Income -taxable 7 000,00

Interest paid on loan account -not deductible because it is funding shares which produce 0
Exempt income