Page 33 - Trading Stock

Solution

 Opening stock (s 22(2)) (R15 000)

 Add back: Adjustment under s 9C(5) R15 000

 Capital gains implications on the sale of shares as s 9C

deems the proceeds to be of a capital nature as the shares

were held for a continuous period of longer than three

years (held for four years):

 Proceeds (R50 000) less base cost (R15 000) = R35 000

capital gain – R30 000 (the annual exclusion) = R5 000

 Taxable capital gain included at an inclusion rate of

33,3% = R1 665

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