QUESTION 4 [15 MARKS]

Jack Dunlop died on 20 April 2014. He was not married. The only asset in his estate was the house he lived in at the time of his death. T

he market value of the house was R3,500,000 at the date of his death. Jack had acquired this house on 15 December 2001 for R1,000,000. The executor awarded the property to Jacks heir, his niece, at a market value of R3,500,000.

Required

4.1. What is the name of the taxable gain that the heir would incur after the sale of the asset? (2)

4.2. Which exact legislation mandates the treatment of said income in accounting records? (2)

4.3. Calculate the proceeds gained by the heir after outstanding taxes paid. Show all calculations (11)