What is formula to be used for this question and how to do this? Question 3 Tony

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What is formula to be used for this question and how to do this?

Question 3 Tony buys a block of land for S120 500 and sells it within the same financial year for S135 800 a How much profit does he make on the land? 0.5 mark Now using the following tax table: Sub division Taxable income SO- $18,200 $18,201- $37,000 S37,001 - $80,000 %) of tax payable Nil 19% 325% 37% 45% 4 80,001 - S180,000 $180,001 & Over b If Tony's other salary for the financial year is $76 850, how much capital gains tax will he pay on the profit he makes on the block of land? 2 marks c Calculate total tax payable by Tony for the financial year 2.5 marks

Explanation / Answer

a Buying price.=$120500. Selling price =$135800 profit. = sale price - buy price. =135800 -120500 =$15300. b. Tony makes profit of $15300 on sale of land .and he has to pay nil tax for the profit as for the taxable income $0 -$18200 tax is nil. c. Total taxable income. $15300 +$76850. = $92150. Net taxable income. 92150 -18200. =$73950. Total tax. =37%of73950. =$27361.5

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