In the following case studies state whether the amounts should be included or not in Gross Income and give your reasons for your decisions.

1.1 Mannie Monday was a cabinet maker in Port Elizabeth and on the death of his aunt, inherited a house in Pretoria. As he settled in Port Elizabeth and had no wish to relocate to Pretoria, he immediately advertised the house for sale in a local newspaper at the asking price of R 800 000 and much to his delight was sold within a week of placing the advert.

1.2 Tankie Tuesday was a landlord owning several properties in Pietermaritzburg. Each tenant is required to deposit a months rent before taking occupation of any of the premises. These deposits are held in a trust account that was set up for this purpose. The deposits are refundable to tenants who have occupied the premises for at least six months, give proper notice and who leave the premises in the condition they were in when they took occupation. In the event of a tenant not complying with the conditions the fund are withdrawn from the trust account and retained by Tinkie otherwise the funds are used to refund the deposits. Tinkie had received R 25 000 into the trust account in the tax year.

1.3 Willy Wednesday is a car dealer. He has 10 demos on his show room floor. Since he wanted to make space for new models he offered two of these to his customers at a discounted prices of R 150 000 each. Both cars were sold by the end of the tax year.

1.4 Twinkie Thursday, an accountant, was the owner of a retail shop selling medical supplies. He was approached by a large pharmaceutical chain to sell his share and he accepted the offer. The deal was for R 500 000 and the price was made up as follows: Debtors R 100 000; Trading stock R 100 000, and Goodwill R 200 000. In terms of the sale agreement the amounts for Debtors, Trading stock and Fixed Assets R 100 000, and the Goodwill was to be paid in annual instalments of R 25 000 for the remainder of Twinkies life.

1.5 Friday was a local seine net fisherman, making his living from his catches. One day while fishing, his net caught on something. On retrieving it he discovered that it contained what appeared to be the wreckage from an old wooden ship. He ascertained that it was the wreck of 250 year old schooner carrying crockery from India to Europe. Realising that the cargo could be of great value he tendered for the salvage of the ship, and was awarded the contract. He hired a suitable boat, equipment and crew which he used in the salvage operation. He sold items salvaged from the ship for an amount of R250 000 in the tax year.