Page 139 - P6 Slide - Taxation - Lecture Day 1

Solution

• Reduction amount = Amount by which the debt

is reduced – Amount applied as consideration

for that reduction = R500 000 – RNil = R500 000.

• •Company A was granted allowances under s

12C(1) of R200 000 a year for the 2014 and 2015

years of assessment. At the time of the

reduction of the debt, the base cost of the

machinery for purposes of para 20 was

accordingly R600 000 (R1 million – R400 000).

• 19

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