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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 2863
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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What would the Tax Implication be in the following senario: PROPERTY

Customer Question

What would the Tax Implication be in the following senario:

PROPERTY IN THE NAME OF OUR TRUST:
We build for approximately R 4,000,000.00 (project completed November 2012)
We moved into the property on the 1 November 2012 and are still stayin there currently
If we were to sell now and say we are able to get R 5,000,000.00, which means a profit of R 1,000,000.00 in the Trust. How will that profit be Taxed and is there a Tax free portion??? Thanks.

Nadia
Submitted: 3 years ago.
Category: Tax
Expert:  Barbara replied 3 years ago.

Welcome and thank you for giving me the opportunity to assist you with your tax question.

 

The sale of the property would trigger capital gains tax (CGT). As a rule the first R10,000 gain or loss is excluded from CGT.

 

Please note, however, that In order to figure the amount that is actually subject to
CGT, you will need to add to your basis any expenses incurred by you to own/purchase it, the cost of any improvements that have been made to it and any other costs directly brought about by the sale of the asset, for example, agent's commission. You would then subtract that amount from the selling price to arrive at
your actual gain.

 

Please let me know if you require further information or clarification.

 

Thank you and best regards,

Barb

 

Expert:  Barbara replied 3 years ago.
Hi, Nadia.

Please let me know if you require further information or clarification. If so, please come back to me here. If not, please take a moment to rate my answer to you since that is an important part of being an expert on JustAnswer, and I strive for excellence.

Thank you and best regards,
Barb
Expert:  Barbara replied 3 years ago.
Hi, Nadia.

Please let me know if you have any further questions. If so, please come back to me here. If not, please take a moment to rate my answer since that is an important part of being an expert on JustAnswer, and I strive for excellence.

Thank you.
Barb

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