Question 5 (15 marks) Jack, a non-citizen of Malaysia, bought a condominium property in Malaysia for investment and property letting purposes, for RM2 million. The agreement was signed on 17 May 2016, Jack settled the full amount of the consideration on 17 June 2016, and the title was transferred on 10 August 2016. Jack paid stamp duty of RM54,000 and legal fees of RM16,000 on the purchase. During the period he owned the condominium property, Jack: ( Spent RM32,000 on extending the balcony area. (ii) Spent RM2,000 on repairing a minor leak which occurred in the kitchen area two years after the acquisition of the condominium. (iii) Instituted legal action against the condominium management body arising from a dispute on the title to the property, and incurred legal fees of RM6,000 (iv) Received compensation of RM22,000 as a result of damage to the condominium from his neighbour. On 18 October 2020, Jack signed an agreement with Plaza Sdn Bhd to dispose of the condominium property for RM3 million. He incurred valuation fees of RM1,000 and brokerage fees of RM20,000 in connection with the disposal. Jack has an allowable loss of RM9,000, which arose from the disposal of a commercial property in Malaysia which he had owned for two years from the date of acquisition at the time of its disposal. Required: (a) Determine the acquisition price of the condominium property for Jack. (3 marks) (b) Determine the disposal price of the condominium property for Jack. (4 marks) ) Compute the chargeable gain subject to real property gains tax (RPGT) on the disposal of the condominium property by Jack. (5 marks) (d) State, with reasons, the RPGT rate applicable to the gain on the disposal of the condominium property by Jack. (3 marks) (Total: 15 marks) Note: You should indicate by the use of the word 'nil' any item referred to in the question for which no adjusting entry needs to be made in the computations for parts (a) and (b). Question 5 (15 marks) Jack, a non-citizen of Malaysia, bought a condominium property in Malaysia for investment and property letting purposes, for RM2 million. The agreement was signed on 17 May 2016, Jack settled the full amount of the consideration on 17 June 2016, and the title was transferred on 10 August 2016. Jack paid stamp duty of RM54,000 and legal fees of RM16,000 on the purchase. During the period he owned the condominium property, Jack: ( Spent RM32,000 on extending the balcony area. (ii) Spent RM2,000 on repairing a minor leak which occurred in the kitchen area two years after the acquisition of the condominium. (iii) Instituted legal action against the condominium management body arising from a dispute on the title to the property, and incurred legal fees of RM6,000 (iv) Received compensation of RM22,000 as a result of damage to the condominium from his neighbour. On 18 October 2020, Jack signed an agreement with Plaza Sdn Bhd to dispose of the condominium property for RM3 million. He incurred valuation fees of RM1,000 and brokerage fees of RM20,000 in connection with the disposal. Jack has an allowable loss of RM9,000, which arose from the disposal of a commercial property in Malaysia which he had owned for two years from the date of acquisition at the time of its disposal. Required: (a) Determine the acquisition price of the condominium property for Jack. (3 marks) (b) Determine the disposal price of the condominium property for Jack. (4 marks) ) Compute the chargeable gain subject to real property gains tax (RPGT) on the disposal of the condominium property by Jack. (5 marks) (d) State, with reasons, the RPGT rate applicable to the gain on the disposal of the condominium property by Jack. (3 marks) (Total: 15 marks) Note: You should indicate by the use of the word 'nil' any item referred to in the question for which no adjusting entry needs to be made in the computations for parts (a) and (b)
