Income And Capital CL

Question 1

Levy

Answer 1

The intention at the time of purchase is important. Ipse dixit

Question 2

Elandsheuwel Farming

Answer 2

The change in shareholders changed the intention of the company. Private Co.

Question 3

Pick n Pay Employee share purchase trust

Answer 3

If the taxpayer has entered into a scheme of profit making or not

Question 4

Stott

Answer 4

Selling at best advantage is not a change in intention

Question 5

Nel

Answer 5

A sale to settle a pressing and unexpected debt is not a change of intention.

Question 6

Nussbaum

Answer 6

A secondary profit making motive can indicate a change in intention

Question 7

Natal estates

Answer 7

Crossing of the Rubicon.

Question 8

Berea West Estates

Answer 8

The use of a realization company does not automatically change the intention from capital to revenue.

Question 9

Founders Hill

Answer 9

The company was formed solely for the realization of property and as such never held the property as a capital asset.

Question 10

Visser

Answer 10

Income is what is produced by capital. Fruit of tree

Question 11

George Forrest Timber

Answer 11

Floating capital disappears in the production process and as such is revenue

Question 12

Fourie Beleggings

Answer 12

Compensation for loss of a capital asset is capital in nature, loss of profits is revenue in nature

Question 13

Stellenbosch Farmers Winery

Answer 13

Compensation for impairment of a business is capital in nature

Question 14

Delgoa

Answer 14

Legality of the source of the income is immaterial

Question 15

MP Finance

Answer 15

Intends to retain amount for his own benefit it is included in gross income regardless if it is illegal in nature

Question 16

Richmond

Answer 16

The sale of an asset at a profit is not necessarily a change in intention. There needs to be a scheme of profit making