ANNEXURE E: FORMATIVE ASSESSMENT $1($FA$1)$

Question $1$

$(20$ marks$)$

a$)$ Tirano Pty Ltd purchased a delivery truck on $1$ December $2021$ for an amount of R$850000.$ Tirano Pty Ltd was entitled to a S$11($e$)$ allowance of $20\%$ on the delivery Truck.

The delivery Truck was sold on $31$ January $2024$ for an amount of R$700000.$

Required:

Use the above information to calculate both the tax value and the recoupment for the year ended $29$ February $2024.$

$(15$ marks$)$

b$)$ Dany Melton decided that at the age of $70$ he wanted to retire and sell his business for R$540950$ but he could not find a potential buyer who could pay this amount in a lump sum. He sold his business to his friend, Nathaly, who paid him a cash amount of R$450000$ and negotiated to pay R$9850$ per month to Dany Melton for the rest of his life.

Required:

Dany Melton has asked you to assist him with the tax implications for the sale of his business. Advise whether the amounts in the scenario will be included in the gross income of Dany. $($When answering the question, clearly refer to the requirements of the 'gross income' definition.$)$

$(5$ marks$)$