July r6 900 x 6 x 31366 35 1 august r9 200 x 6 x

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July (R6 900 x 6% x 31/366)35(1)August (R9 200 x 6% x 31/366)47(1)Cash received800Add:Loan amount calculated above(9 200)Accrued leave pay-out(not a severance benefit)10 00010 000(1)Residential accommodation(par 9(3)(a))(A-B) x C/100 x D/12(R182 400 - R79 000) x 18/100 x 6/129 306(2)Less:Consideration paid by the employee (R250 x 6)(1 500)(1)7 8067 806
79TAX4861/106/2020QUESTION 10- SUGGESTED SOLUTION (continued)RRRBursary20 000(1)Remuneration proxy is less than R600 000 and NQFlevel 4,Less: Exempt s10(1)(q)(ii)(bb) (under par 2(h) read withpar 13 of the 7th Schedule)(20 000)(1)00Subtotal311 511Local interest income(Cindi-married in COP)(R200 000 x 4% (actual rate)) x 50%4 000(2)Less:Exempt ito s10(1)(i)(xv) ltd to R23 800(4 000)-(1)Lump sum from Platinum Pension Fund950 000(1)Less:Portion transferred to RAF (50%)(475 000)Less:Previously disallowed deductions(60 000)(1)Taxable portion of lump sum (taxed separately - seebelow)415 000Capital gain/loss from sale of flatProceeds on disposal360 000Less:Base cost(410 000)Capital loss(50 000)(1)Annual exclusion - the capital loss isreducedwith theannual exclusion(40 000)(1)Capital loss - carried forward to 2021(10 000)-(1)Contributions to retirement funds:Pension fund: Actual: (R500 x 6) x 2 =6 000(1)Retirement annuity fund (R750 X 5)3 750(1)9 750Section 11F deduction: Limited to the lesser of:R350 000; or27.5% of greater of:Remuneration: R311 511R30 000R210 000 = R71 511Taxable income including any taxable capital gains= R311 511 + 0Thus 27.5% of R311 511 = R85 665Taxable income excl. any taxable capital gains = R311 511(1)Thus, R85 665 but limited to actual(9 750)(2)Taxable income (excluding lump sums)301 761
80TAX4861/106/2020QUESTION 10-SUGGESTED SOLUTION (continued)RRRNormal tax determined per progressive tax table ontaxable incomeTax per the tables R35 253 + [(R301 761R195 850)x 26%]62 790(1)Less:Primary Rebate(14 220)(1)Normal tax liability on lump sumLump sum received from pension fund (50%)475 000Less:Deductions not allowed previously(60 000)(1)415 000Tax on lump sum withdrawal benefit as per table 2:(not seen as a retirement benefit as he resigned)(R415 000 - R25 000) x 18%70 200(1)Less:Section 6A medical scheme fees tax credits((R620 +R209+R209+R209) x 12m)(14 964)(2)Less:Section 6B tax credit (Rnil x 25%)-(1)Contributions ((R1 800 x 2) x 12m)43 200(1)Less: 4 x Section 6A tax credit (4 x R14 964)(59 856)(1)Qualifying contributions (limit to Rnil, no negativevalues)nilQualifying medical expenses7 000(1)7 000Less:7.5% of taxable income (R301 761 x 7.5%)(22 632)(1)Limited toNilLess:Employees tax deducted(4 000)(1)Total normal tax due by or to Lenny for 202099 806Total42Max40
81TAX4861/106/2020QUESTION 1136 MarksFred Osman is 60 years old and married in community of property to Francis.They are both RSAresidents.Fred is the sales manager at J & J Pharmaceuticals Limited (employer) and responsible for15 sales representatives at the company.Fred received the following income and benefits and incurred the following expenses during the 2020year of assessment:Income and benefits from employerNoteRPensionable salary300 000Commission1193 000Entertainment allowance213 200Free use of motor vehicles3?

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Term
Fall
Professor
NoProfessor
Tags
Progressive Tax, Taxation in the United States

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