Page 8 - F6 - Special Deductions

Solution

A) Market value of R2000 per share:

 (R2 000 x 4) – (R1 x 4) = R7 996

 MV-cost < R10 000

 Full amount deductible R7 996 x 74 = R591 704

B) Market value of R4000 per share:

 (R4 000 x 4) – (R1 x 4) = R15 996

 MV - cost > R10 000

 Deductible R10 000 x 74 = R740 000

 Carried forward = R5 996 x 74 = R443 704