PTI Inc., located in a country which has a capital gains tax, conducted the following transactions: a. Purchased a building in February 2018 for $26,000,000. In March 2019, the company spent $2, 800,000 to install solar panels for electricity in the building. The building was sold for $40,000,000 in 2021. The annual maintenance cost was $500,000. The cost of advertising the sale of the building and the legal fees amounted to $1,200,000. b. A motor vehicle was purchased for $5 million on January 1, 2018. The vehicle was sold in 2021 for $4.5 million. c. Bought an antique painting for $3.5 million in 2019. The painting was sold in 2021 for 1 million. d. Purchased a Government bond for $5,000,000. The company is entitled to Annual Exemption of $500,000. Capital losses as at 1 January 2021 was $7,500,000. Required: Calculate the capital gains tax in 2021, assuming a capital gains tax of 20% If PTI Inc. were resident in Jamaica, what would the balancing adjustment be on the sale of the motor vehicle? What is the impact of this adjustment on the amount claimed for capital allowance?
Part B
PTI Inc., located in a country which has a
transactions:
a. Purchased a building in February 2018 for $26,000,000. In March 2019, the
company spent $2, 800,000 to install solar panels for electricity in the building. The
building was sold for $40,000,000 in 2021. The annual maintenance cost was
$500,000. The cost of advertising the sale of the building and the legal fees
amounted to $1,200,000.
b. A motor vehicle was purchased for $5 million on January 1, 2018. The vehicle was
sold in 2021 for $4.5 million.
c. Bought an antique painting for $3.5 million in 2019. The painting was sold in 2021
for 1 million.
d. Purchased a Government bond for $5,000,000.
The company is entitled to Annual Exemption of $500,000. Capital losses as at 1 January
2021 was $7,500,000.
Required:
Calculate the capital gains tax in 2021, assuming a capital gains tax of 20%
If PTI Inc. were resident in Jamaica, what would the balancing adjustment be on the sale of the motor vehicle?
What is the impact of this adjustment on the amount claimed for capital allowance?
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