TAX2601 ASSIGNMENT 5
DUE 24 OCTOBER 2022
PLUS LATEST EXAM PACK
, QUESTION 1
Rental Sales from tenants Rental sales from tenants qualifies as
gross income as it satisfies al the
elements of the gross income definition,
that is, the total amount is received by,
has accrued to, or is in favor of the
resident in cash or otherwise during the
year of assessment, and it is not of a
capital nature. Therefore Rental sales
should be included in gross income
Amount received from XP(pty) The amount received from XP(pty)Ltd
though it was received by n Investprops
(Pty) Ltd, it was not in their favor as it will
have to be Reimbursed. The amount was
erroneously paid Into the account.
Dividends Received The R700 000 will constitute gross
income to investprops as it was received
during the current year of assessment
and is not of a capital nature. However it
should be noted that dividend income is
exempt from income tax and therefore
will not constitute taxable income.
Leasehold improvements The leasehold improvements incurred by
tenant, though accruing to Investptprops
do not constitute gross income as they
are expenditure of a capital nature. The
definition of gross income specifically
excludes receipts of a capital nature.
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DUE 24 OCTOBER 2022
PLUS LATEST EXAM PACK
, QUESTION 1
Rental Sales from tenants Rental sales from tenants qualifies as
gross income as it satisfies al the
elements of the gross income definition,
that is, the total amount is received by,
has accrued to, or is in favor of the
resident in cash or otherwise during the
year of assessment, and it is not of a
capital nature. Therefore Rental sales
should be included in gross income
Amount received from XP(pty) The amount received from XP(pty)Ltd
though it was received by n Investprops
(Pty) Ltd, it was not in their favor as it will
have to be Reimbursed. The amount was
erroneously paid Into the account.
Dividends Received The R700 000 will constitute gross
income to investprops as it was received
during the current year of assessment
and is not of a capital nature. However it
should be noted that dividend income is
exempt from income tax and therefore
will not constitute taxable income.
Leasehold improvements The leasehold improvements incurred by
tenant, though accruing to Investptprops
do not constitute gross income as they
are expenditure of a capital nature. The
definition of gross income specifically
excludes receipts of a capital nature.
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