Mr Winston entered into an agreement that gave him the right to purchase stationery for R12 000. This stationery normally costs R17 000. Mr Winston has not exercised the option by the end of the year of assessment. Mr Winston will not be able to deduct this amount under the general deduction formula as it was of a capital nature True or False

Mr Winston entered into an agreement that gave him the right to purchase stationery for R12 000. This stationery normally costs R17 000. Mr Winston has not exercised the option by the end of the year of assessment. Mr Winston will not be able to deduct this amount under the general deduction formula as it was of a capital nature True or False

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 51P

See similar textbooks

Similar questions

Mr. X was injured in a vehicular accident in 2018. He incurred and paid medical expenses of P20,000 and legal fees of P10,000 during the taxable year. In 2020, he received P70,000 as settlement from the insurance company which insured the car owned by the other party involved in the accident. From the above payments and transactions, the amount of taxable income in 2020 is? a. P70,000 b. P50,000 c. P40,000 d. zero
Kenneth is the Chief Executive Officer of Alpha Ltd. He was provided with a flat in Repulse Bay by Beta Ltd, a subsidiary of Alpha Ltd. No remuneration was paid by Beta Ltd to Kenneth. In connection with Kenneth's employment with Alpha Ltd, he received salary income totalling $12,000,000 for the year of assessment 2020/21. In addition, he exercised a share option during the year and the taxable gain was $560,000. Deductible expenses agreed with the Inland Revenue Department to be $170,000. What is the taxable benefit from the accommodation provided by Beta Ltd for the year of assessment 2020/21?
On 1 April 2018, Magda received a low interest loan of $40,000 from her employer, ABC Pty Ltd. The interest payable was only 3%. Magda used half of the loan to pay for her wedding and half of the loan to buy shares in Pinkscope Steel Ltd. Advise ABC Pty Ltd of the grossed up taxable value amount .
Mr. F sold his principal residence which he acquired for P1,000,000 for P3,000,000. At the time of sale, the fair market value is P2,500,000. After 1 year, Mr. F bought a house and lot for P3,200,000. Assuming all other requisites are present, how much is Income subject to Capital Gain Tax?
On October 12, 2021, Max purchased one Bitcoin for $57,322. On December 19, 2021, he sold the Bitcoin for $46,503. On December 29, 2021, he bought another Bitcoin for $48,119. These were his only transactions during the year involving virtual currency. When Max files his 2021 return, the sale of the Bitcoin should be reported as a: $0 capital gain or loss, after making the adjustment for a disallowed wash sale loss. $10,819 adjustment to income on Schedule 1, Additional Income and Adjustments to Income. $10,819 foreign currency loss under Section 988 of the Internal Revenue Code. $10,819 short-term capital loss.
Xavier bought furniture and fixtures (7-year property) on September 15, 2021, for $1,055,000. He elects to expense as much as possible under Section 179 but does not elect the 100% bonus. Xavier's earned income for the year is $1,200,000. What is the maximum deduction Xavier can take in 2021 for the equipment?
Omega Corporation purchased a motor vehicle worth P1,400,000 for the use of its executive. It was registered under the executive’s name despite the agreement that it should be used partly for the company’s benefit. How much is the fringe benefits tax?
Frank's Mini Mart sold a piece of equipment on an installment agreement, to a competitor on the other side of town. The other owner failed to make the payments and Frank had to repossess the equipment. What is Frank's gain or loss on repossessed personal property with a fair market value of $12,000 on the date of repossession, where the seller's basis in the installment obligation at the time of repossession is $7,500, and the costs of repossession were $500? (a) Loss of $500. (b) Gain of $4,000. (c) Gain of $4,500 (d) Gain of $5,000.
On 1 April 2020, Aron received a restored car from his employer Telcom Pty Ltd, as part of his salary and the car cost $15,000.00. He paid $1000 per month for the running costs. During the FBT year ended 31 March 2021, it had run 14,000 km, of which half were for business. Explain and calculate the tax consequences of this arrangement, with appropriate references to the relevant law.
Jackson invested $192,000 in a passive activity five years ago. On January 1, 2018, his at-risk amount in the activity was $45,500. His share of the income and losses in the activity were $52,650 loss in 2018, $20,350 loss in 2019, and $80,750 gain in 2020. Required: How much can Jackson deduct in 2018 and 2019? What is his taxable income from the activity in 2020? Keep in mind the at-risk rules as well as the passive loss rules.
"A" owns 100 shares of Humdrum Corporation which he purchased several years ago for $10,000. What are the tax consequences to A on the liquidation of Humdrum Corporation in the following alternative situations: (a) Humdrum distributes $20,000 to A in exchange for his stock? (b) What result in (a), above, in A receives $10,000 in the current year (year one) and $10,000 in year two? Would there be any problem if Humdrum does not adopt a formal plan of complete liquidation in year one?
During the year ended 5 April 2022 Eric (a higher rate taxpayer) disposed of the following asset: (a) A small cottage in Devon which he had inherited in August 1988 when its value was £20,000 and he subsequently used as a holiday cottage for his own use. In September 1989 he had added a conservatory to the property at a cost of £3,500. Eric did not use the cottage as his main residence at any stage, and he sold it for £225,000 in July 2021. Eric incurred legal and estate agent’s fees of £1,500 on the disposal of the property. (b) A vacant 8-hectare plot of land for £52,800 in February 2022. The plot was part of a 12-hectare plot originally bought by Eric for £31,700 in October 1988 and not used by him as a business asset nor is it associated with a residential property. Incidental costs of disposal were £1,300. The remaining 4-hectare plot was valued at £22,000 in February 2022. © Eric sold a motor car for £18,400. The car was purchased in January 2012 for £17,800.…