QQuestionAccounting
QuestionAccounting
On 24 August 2024, Mr. Jacobs, a retired businessman aged 67, died in a motor accident. He was
married out of community of property to his wife Sara (both are resident in South Africa).
On 24 August 2024 he owned the following assets:
1. An Audi convertible with a market value of R^850 000. He bought the car on 1 January 2024 for R^1
380 000. This motor vehicle was bequeathed to his son, Rami.
2. A holiday flat in Plettenberg Bay with a market value of R^4,5 million. He had purchased the flat on
1 May 2001 for R^2,75 million. The market value on 1 October 2001 was R^3.4 million. In his
valid will he bequeathed this asset to the Rahman Family Trust. The time apportionment based cost
is estimated at R^3.1 million.
3. A 12 metre long yacht with a market value of R^3.4 million. It had originally cost him R^4.6 million
in 2017. This yacht was bequeathed to the Sailing for Youth Foundation, an approved public benefit
organisation.
4. His Gold Krugerrand coin collection with a market value of R^750 000. This were originally
purchased by his father for R^150 000 and had a market value of R^450 000 when Mr Rahman
inherited the coins on 1 September 2011. He bequeathed this collection to his surviving spouse.
5. His primary residence in Constantia with a market value of R^7.5 million. He owned this property
jointly with his wife i.e. each owned 50%. They had purchased the property on 30 June 1998 for
R^2.2 million. The market value on 1 October 2001 was R^3.45 million. In his will he left his share to
his daughter on condition that she did not attempt to sell it until the death of his wife.
REQUIRED:
Calculate Mr Jacobs' taxable capital gain for the 2024 year of assessment. Give reasons if any
exclusions applied.
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Answer
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Step 1: Determine the cost price and market value of each asset owned by Mr.
Jacobs at the time of his death.
Step 2
Audi convertible: - Cost price: R^1,380,000 - Market value: R^850,000
Final Answer
Jacobs' taxable capital gain for the 2024 year of assessment is R^5,155,000.
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