TAX2601 ASSIGNMENT 4
SEMESTER 2 - 2023
UNIQUE NUMBER:
DUE DATE: 09 OCTOBER 2023
, TAX2601 ASSIGNMENT 4
UNIQUE NUMBER:
CLOSING DATE: 15 SEPTEMBER 2023
MARKS: 35
CONTAINS 3 DIFFERENT QUIZ ATTEMPTS WITH CALCULATIONS AND EXPLANATIONS
INCLUDED !!!!!
FIRST ATTEMPT QUIZ SOLUTIONS:
Started on Tuesday, 03 October 2023, 09:00 AM
State Finished
Completed on Tuesday, 03 October 2023, 10:14 AM
Time taken 1 hour 14 mins
Marks 35.00/35.00
Grade 100.00 out of 100.00
1
,Calculations:
Calculation of the capital allowance to be claimed by Ubuntu (Pty) Ltd on the second-hand
machine for the 2023 year of assessment ending 28 February, assuming Ubuntu (Pty) Ltd is a
Small Business Corporation.
Small Business Corporations (SBCs) in South Africa are eligible for accelerated capital
allowances.
The calculation for the capital allowance on the machine is as follows: Cost of the machine:
R1 800 000
For Small Business Corporations, you can claim a 100% allowance for machinery and
equipment (Section 12C of the Income Tax Act). So, the capital allowance for the machine is:
Capital allowance = Cost of the machine Capital allowance = R1 800 000
Therefore, the correct answer for the capital allowance to be claimed by Ubuntu (Pty) Ltd
on the machine is: c. R1 800 000
2
,Calculations
The correct answer is (d) Trademark R0 Patent R33 500
Assumptions:
The trademark was acquired on 1 November 2022.
The patent was acquired on 1 December 2022.
Ubuntu (Pty) Ltd is a Small Business Corporation (SBC).
Calculation of deduction or allowance for trademark and patent:
The Income Tax Act of South Africa does not allow any deduction or allowance for the
acquisition of trademarks. However, the Income Tax Act does allow a deduction for the
acquisition of patents. The deduction is calculated at a rate of 5% per year over a period of
20 years.
For the 2023 year of assessment, the deduction for the patent acquired on 1 December
2022 would be:
R670 000 (cost of patent) × 5% = R33 500
Therefore, the deduction or allowance available to Ngwenya (Pty) Ltd for the year of
assessment ending 28 February 2023 is:
Trademark = R0
Patent = R33 500
3
, Calculations:
To calculate Ngwenya (Pty) Ltd's taxable income for its 2023 year of assessment after
allowing a deduction for donations in terms of section 18A, you need to subtract the
donation from its taxable income.
Taxable income before donation = R470 000 Cash donation (Section 18A donation) = R35
000
Taxable income after donation = Taxable income before donation - Donation Taxable
income after donation = R470 000 - R35 000 Taxable income after donation = R435 000
So, the correct answer is:
d. R435 000
4
SEMESTER 2 - 2023
UNIQUE NUMBER:
DUE DATE: 09 OCTOBER 2023
, TAX2601 ASSIGNMENT 4
UNIQUE NUMBER:
CLOSING DATE: 15 SEPTEMBER 2023
MARKS: 35
CONTAINS 3 DIFFERENT QUIZ ATTEMPTS WITH CALCULATIONS AND EXPLANATIONS
INCLUDED !!!!!
FIRST ATTEMPT QUIZ SOLUTIONS:
Started on Tuesday, 03 October 2023, 09:00 AM
State Finished
Completed on Tuesday, 03 October 2023, 10:14 AM
Time taken 1 hour 14 mins
Marks 35.00/35.00
Grade 100.00 out of 100.00
1
,Calculations:
Calculation of the capital allowance to be claimed by Ubuntu (Pty) Ltd on the second-hand
machine for the 2023 year of assessment ending 28 February, assuming Ubuntu (Pty) Ltd is a
Small Business Corporation.
Small Business Corporations (SBCs) in South Africa are eligible for accelerated capital
allowances.
The calculation for the capital allowance on the machine is as follows: Cost of the machine:
R1 800 000
For Small Business Corporations, you can claim a 100% allowance for machinery and
equipment (Section 12C of the Income Tax Act). So, the capital allowance for the machine is:
Capital allowance = Cost of the machine Capital allowance = R1 800 000
Therefore, the correct answer for the capital allowance to be claimed by Ubuntu (Pty) Ltd
on the machine is: c. R1 800 000
2
,Calculations
The correct answer is (d) Trademark R0 Patent R33 500
Assumptions:
The trademark was acquired on 1 November 2022.
The patent was acquired on 1 December 2022.
Ubuntu (Pty) Ltd is a Small Business Corporation (SBC).
Calculation of deduction or allowance for trademark and patent:
The Income Tax Act of South Africa does not allow any deduction or allowance for the
acquisition of trademarks. However, the Income Tax Act does allow a deduction for the
acquisition of patents. The deduction is calculated at a rate of 5% per year over a period of
20 years.
For the 2023 year of assessment, the deduction for the patent acquired on 1 December
2022 would be:
R670 000 (cost of patent) × 5% = R33 500
Therefore, the deduction or allowance available to Ngwenya (Pty) Ltd for the year of
assessment ending 28 February 2023 is:
Trademark = R0
Patent = R33 500
3
, Calculations:
To calculate Ngwenya (Pty) Ltd's taxable income for its 2023 year of assessment after
allowing a deduction for donations in terms of section 18A, you need to subtract the
donation from its taxable income.
Taxable income before donation = R470 000 Cash donation (Section 18A donation) = R35
000
Taxable income after donation = Taxable income before donation - Donation Taxable
income after donation = R470 000 - R35 000 Taxable income after donation = R435 000
So, the correct answer is:
d. R435 000
4
