TAX3761 ASSESSMENT 3 - COMPLETE ANSWERS
QUESTION 1
a)
, Item Explanation John Snow® Karen Snow®
50% each (married in
Proceeds 2 500 000 2 500 000
community of property)
10% × R5,000,000 ÷ 2 =
Less: Agent Commission -275 000 -275 000
R275,000 each
Net Proceeds 2 225 000 2 225 000
Base Cost:
Original purchase price R1,400,000 ÷ 2 700 000 700 000
Bond registration R10,500 ÷ 2 5 250 5 250
R60,000 ÷ 2 - improvement to
Roof repairs (June 2021) 30 000 30 000
property
R80,000 ÷ 2 - incurred to
Landscaping (Nov 2024) 40 000 40 000
enhance disposal
Total Base Cost 775 250 775 250
Capital Gain 1 449 750 1 449 750
Less: Primary Residence R2,000,000 ÷ 2 (married
-1 000 000 -1 000 000
Exclusion couple)
Less: Annual Exclusion Per Annexure 1 -40 000 -40 000
Taxable Capital Gain 409 750 409 750
Inclusion Rate (40%) Included in taxable income 163 900 163 900
Items with R Nil Impact:
Monthly bond payments: Capital and interest payments are not deductible as base cost (already included in purchase
price)
Rates and taxes: Operating expenses, not capital improvements
Garage extension: Used for business purposes, not primary residence enhancement
QUESTION 1
a)
, Item Explanation John Snow® Karen Snow®
50% each (married in
Proceeds 2 500 000 2 500 000
community of property)
10% × R5,000,000 ÷ 2 =
Less: Agent Commission -275 000 -275 000
R275,000 each
Net Proceeds 2 225 000 2 225 000
Base Cost:
Original purchase price R1,400,000 ÷ 2 700 000 700 000
Bond registration R10,500 ÷ 2 5 250 5 250
R60,000 ÷ 2 - improvement to
Roof repairs (June 2021) 30 000 30 000
property
R80,000 ÷ 2 - incurred to
Landscaping (Nov 2024) 40 000 40 000
enhance disposal
Total Base Cost 775 250 775 250
Capital Gain 1 449 750 1 449 750
Less: Primary Residence R2,000,000 ÷ 2 (married
-1 000 000 -1 000 000
Exclusion couple)
Less: Annual Exclusion Per Annexure 1 -40 000 -40 000
Taxable Capital Gain 409 750 409 750
Inclusion Rate (40%) Included in taxable income 163 900 163 900
Items with R Nil Impact:
Monthly bond payments: Capital and interest payments are not deductible as base cost (already included in purchase
price)
Rates and taxes: Operating expenses, not capital improvements
Garage extension: Used for business purposes, not primary residence enhancement
