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Crusader - explain please

Meneer - ek glo dit nie . . .
 
Wyvern said:
Thanks Crusader

Anyone else who wanna try explain this to me?

QUESTION 4 (10 marks, 12 minutes)
Milenda Buys, 54 years old, has lived in Cape Town for the past 26 years. During the 2014 year of assessment, Milenda got married and moved to Pretoria. Milenda sold the following assets on 31 July 2013, before moving to Pretoria.
House:
Milenda purchased the house in Cape Town on 1 June 1987 for R104 000. She lived in the house from the day that she purchased it until the date of sale. In 2004 she made improvements to the house at a cost of R560 000. The house was valued at R3 500 000 on 1 October 2001 and the time apportionment base cost of the house is R2 959 550. The house was sold for R6 750 000.
Furniture:
Milenda sold some of the furniture, as she was moving into a smaller house. The furniture was sold for R30 000. The original cost price of the furniture sold amounted to R40 000.
Assessed capital loss:
Loss brought forward from the 2013 year of assessment amounted to R5 500.
REQUIRED:

Calculate the taxable capital gain of Milenda Buys for the year of assessment ended 28 February 2014. You can assume she did not sell any other assets during the year of assessment.
Click to expand...

Firstly the Furniture is personal use so there is no CGT for that

For the house

Proceeds are R 6 750 000
Base cost is R 104 000 however cgt only started in 2001 so we can't use that value
We have 3 options: 20% proceeds @ R 1 350 000
Valuation @ R 3 500 000
T.A.B. @ R 2 959 550

Assuming we want the best benefit we will take the valuation date value on October 2001.
Then we include the approved cost of R 560 00 after valueation date so BC is R 4 060 000

Calc
Proceeds 6 750 000
BC 4 060 000
Gain =2 690 000
Primary Residence rebate (2 000 000)
Net gain off =690 000

Then we take that X 33.3% for CGT of R230 000

All you are left with is your annual exclusion and also you prior years net loss to get your taxable gain


Don't quote me on any of this
 
Last edited:
Ike_009 said:
Firstly the Furniture is personal use so there is no CGT for that

For the house

Proceeds are R 6 750 000
Base cost is R 104 000 however cgt only started in 2001 so we can't use that value
We have 3 options: 20% proceeds @ R 1 350 000
Valuation @ R 3 500 000
T.A.B. @ R 2 959 550

Assuming we want the best benefit we will take the valuation date value on October 2001.
Then we include the approved cost of R 560 00 after valueation date so BC is R 4 060 000

Calc
Proceeds 6 750 000
BC 4 060 000
Gain =2 690 000
Primary Residence rebate (2 000 000)
Net gain off =690 000

Then we take that X 33.3% for CGT of R230 000

All you are left with is your annual exclusion and also you prior years net loss to get your taxable gain

Don't quote me on any of this
Click to expand...

Ike I owe you beer when you get to cape town again! Thanks that makes so much more sense.
 
Ike_009 said:
Firstly the Furniture is personal use so there is no CGT for that

For the house

Proceeds are R 6 750 000
Base cost is R 104 000 however cgt only started in 2001 so we can't use that value
We have 3 options: 20% proceeds @ R 1 350 000
Valuation @ R 3 500 000
T.A.B. @ R 2 959 550

Assuming we want the best benefit we will take the valuation date value on October 2001.
Then we include the approved cost of R 560 00 after valueation date so BC is R 4 060 000

Calc
Proceeds 6 750 000
BC 4 060 000
Gain =2 690 000
Primary Residence rebate (2 000 000)
Net gain off =690 000

Then we take that X 33.3% for CGT of R230 000

All you are left with is your annual exclusion and also you prior years net loss to get your taxable gain


Don't quote me on any of this
Click to expand...

Ike, Ike jy's ons man,
As jy nie kan nie, los dit dan!
 
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