Danny Dan (40 years) operated a satellite installation business as a sole proprietor. On 1 April in the current year of assessment, he decided to enter into a partnership agreement with Jason John (28 years). They agreed to share profits on a 50:50 ratio. The following income and expense items for the current year of assessment relate to the partnership:

income. 930 000 gross income. 915 000 irrevocable debts (recovered No.1). 15 000

expenses. 986 550 sundry expenses. 192 450 admin expenses. 56 000 depreciation (note. 2) 74 300 salaries: Danny. 225 000 Jason. 180 000

other employees. 78 000 retirement annuity. 26 300 Danny (note 3) Jason (note 3). 15 000 provident fund. 19 300 (note 4) drawings Danny. 14 200 Bad debt note 5. 6 000 profit on sale of building note 6. 100 000

Additional information

a) irrevocable debts recovered

The irrevocable debts recovered relates to R15 000 for debtors brought into the partnership by Jason

b) depreciation delivery vehicle 1: This vehicle was purchased new by Jason John on 30 May 2016 for R150 000 delivery vehicle 2: This vehicle was purchased second hand in cash by the partnership on 1 April of the current year of assessment 2022, when Jason joined, at a cost of R200 000. In terms of interpretation Note 4 delivery vehicles are written off over a four year period. The second hand delivery vehicle was purchased from a person who is registered for VAT purposes

c) contribution to retirement annuity funds

The retirement annuity find contribution are allowed as a deduction for the partnership since they are paid in terms of partnership agreements

d) contribution to Provident fund the partnership contributes R19 300 on behalf of its employees to a Provident fund.

e) bad debts R2 000 of bad debts relates to a debtor brought into partnership by Jason

f) profit on sale of an office building On 1 April the current year assessment Danny bought a new office building at a cost of R2 500 000. Due to economic pressures Danny sold the building and made a capital gain of R100 000. The section 13 allowance on the building is calculated at 5% for the year

g) General All amounts exclude VAT, except where otherwise indicated. The partnership is a registered vendor for VAT purposes

REQUIRED Calculate the taxable income for Danny Dan for the year of assessment ending February 2022 hi