Reference no: EM133266576

A taxpayer sold a primary residence during the current year of assessment for R9 975 000 of which R6 234 375 is attributable to the land. The taxpayer is married in community of property and her primary residence is situated on 10 hectares of land. The base cost of the residence is R7 995 000 of which R5 596 500 is attributable to the land. What portion of the capital gain or loss qualifies for the primary residence exclusion?

1. R734 850 [(((R6 234 375 - R5 596 500) x (2/10)) + ((R9 975 000 - R6 234 375) - (R7 995 000 - R5 596 500))) / 2]
2. R671 063 [(((R9 975 000 - R6 234 375) - (R7 995 000 - R5 596 500)))]
3. None of the options are correct.
4. Rnil the residence is situated on land that exceeds 10 hectares
5. R198 000 [(((R6 234 375 - R5 596 500) x (2/10)) + (((R9 975 000 - R6 234 375) - (R7 995 000 - R5 596 500)) x (2/10)) / 2]