Tebego is a farmer whose farm is located in South of Botswana. The following summarised information was provided to you relating the farming operations his farming activities. He has opted to be registered as a farmer to allow him to utilize all the relevant loss relief available to farmers. Results for the year ended

31 December 2019 (P) 2020 (P) 2021 (P) 2022 (P)

Taxable farming income(loss) 960,000 (2 250 000) 570 000 1 500 000

Chargeable gains 93 000 330 000 180 000

Allowable loss (270 000)

Bank interest 75 000 84 000 84 000 105 000

Employment income 185 000 190 000 200 000 210 000

Required

Calculate Tebogos tax liabilities (tax payable) for each of the four years after claiming maximum loss relief at the earliest possible times.

a) Assume that Tebogo has decided to apply Section 46. [3 marks]

b) Assume that Tebogo has decided to apply Section 42 in 2021 [3 marks]

c) Assume that Tebogo has decided to apply Section 42 in 2022 [3 marks]

d) Identify the option which minimizes Tebogo tax payable. [3 marks]

e) Explain the different ways in which farming losses may be relieved by an individual and by a company.