Page 605 - SAIT Compendium 2016 Volume2

IN 69 Income Tax acT: InTeRPReTaTIon noTes IN 69
Purchases of game livestock this year
300 000
Result:
Determination of taxable income of the farmer:
R
Farming income
50 000
Closing stock
Livestock at standard value:
Game
Nil
Other
300
Value of produce
2 000
2 300
52 300
Less:
Opening stock:
Livestock at standard value:
Game
Nil
Other
279
Produce
Nil
(279)
Less:
52 021
Allowable deduction—purchase of livestock [section 11 (a) limited by paragraph 8—see below]
(50 021)
Taxable income from the carrying on of farming operations
2 000
Limitation on the cost of acquisition of livestock (paragraph 8):
Income received and accrued from farming operations
50 000
Value of livestock held and not disposed of at the end of the year
300
Value of livestock held and not disposed of at the beginning of the year
_(279)
Maximum deduction permissible
50 021
Expenditure deductible under section 11 (a) on the acquisition of game livestock
300 000
Less: Deductible amount current year
(50 021)
Amount of deduction carried forward to the following year
249 979
saIT comPendIum oF Tax LegIsLaTIon VoLume 2 597