Page 11 - Gross Income class slides
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GROSS INCOMEOSS INCOME
GR
Total amount in cash or otherwise
Example 2
• Mary owns a boutique. She received 5 000 shares as
compensation for stock that she sold to a Sandton businessman’s
wife. At the time that the contract was entered into it noted that
the total value of the shares (at that date) was R10 000. At the
date that she becomes entitled to the shares they are worth R15
000.
• What will the total amount be?
Solution:
• The shares are property that has an ascertainable money value.
The market-value of the shares at the date that Mary becomes
entitled to them must be included in Betty’s gross income. The
fact that that value of the shares in the contract was R10 000 is
irrelevant.
• This is an example of the application of the Lace Proprietary
Mines Ltd v CIR case’s principle
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