а. Mohammad owned few real properties in Malaysia. The details of the transactions on the real properties owned by him are as follows: Apartment Mohammad purchased an apartment in April 2013 costing RM95,000. The incidental costs incurred on the purchased of the apartment was RM5,250. In June 2015, there was an offer from his friend to buy the apartment for RM140,000 whilst the market value is only RM120,000. Instead of selling the apartment to his friend, Mohammad transferred the properly to his sister who as a gift for her wedding. Land In June 2014, Mohammad purchased a piece of land costing RM1 million from his business associate. He incurred RM5,000 legal fees for establishing the title of the land. Other expenses incurred are as follows: Advertising cost to seek for seller RM2,000 Valuation fees prior to the acquisition RM5,000 Stamp duty for the purchase agreement RM1,500 Expenses incurred to improve the land RM30,000 In Mac 2016, he then sold the land for RM1.3 million to a Singaporean, Mr. Pang. Prior to that, an American, Mr. White was interested to buy the land and had paid RM10,000 as a deposit. However, the deal was called off since Mr. White was unable to finance the purchase. The incidental cost on the disposal of the land was RM10,000. Required: Determine whether Real Property Gains Tax (RPGT) is applicable upon disposal of the apartment and land made by Mohammad and calculate the RPGT Payable (if any).
а. Mohammad owned few real properties in Malaysia. The details of the transactions on the real properties owned by him are as follows: Apartment Mohammad purchased an apartment in April 2013 costing RM95,000. The incidental costs incurred on the purchased of the apartment was RM5,250. In June 2015, there was an offer from his friend to buy the apartment for RM140,000 whilst the market value is only RM120,000. Instead of selling the apartment to his friend, Mohammad transferred the properly to his sister who as a gift for her wedding. Land In June 2014, Mohammad purchased a piece of land costing RM1 million from his business associate. He incurred RM5,000 legal fees for establishing the title of the land. Other expenses incurred are as follows: Advertising cost to seek for seller RM2,000 Valuation fees prior to the acquisition RM5,000 Stamp duty for the purchase agreement RM1,500 Expenses incurred to improve the land RM30,000 In Mac 2016, he then sold the land for RM1.3 million to a Singaporean, Mr. Pang. Prior to that, an American, Mr. White was interested to buy the land and had paid RM10,000 as a deposit. However, the deal was called off since Mr. White was unable to finance the purchase. The incidental cost on the disposal of the land was RM10,000. Required: Determine whether Real Property Gains Tax (RPGT) is applicable upon disposal of the apartment and land made by Mohammad and calculate the RPGT Payable (if any).
Chapter14: Property Transactions: Determination Of Gain Or Loss And Basis Considerations
Section: Chapter Questions
Problem 29P
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Transcribed Image Text:Mohammad owned few real properties in Malaysia. The details of the transactions
on the real properties owned by him are as follows:
а.
Apartment
Mohammad purchased an apartment in April 2013 costing RM95,000. The
incidental costs incurred on the purchased of the apartment was RM5,250. In June
2015, there was an offer from his friend to buy the apartment for RM140,000
whilst the market value is only RM120,000. Instead of selling the apartment to his
friend, Mohammad transferred the properly to his sister who as a gift for her
wedding.
Land
In June 2014, Mohammad purchased a piece of land costing RM1 million from his
business associate. He incurred RM5,000 legal fees for establishing the title of the
land. Other expenses incurred are as follows:
Advertising cost to seek for seller
RM2,000
Valuation fees prior to the acquisition
RM5,000
Stamp duty for the purchase agreement
RM1,500
Expenses incurred to improve the land
RM30,000
In Mac 2016, he then sold the land for RM1.3 million to a Singaporean, Mr. Pang.
Prior to that, an American, Mr. White was interested to buy the land and had paid
RM10,000 as a deposit. However, the deal was called off since Mr. White was
unable to finance the purchase. The incidental cost on the disposal of the land was
RM10,000.
Required:
Determine whether Real Property Gains Tax (RPGT) is applicable upon disposal
of the apartment and land made by Mohammad and calculate the RPGT Payable
(if any).
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