How Much Do You Know About Gross Income and Taxable Capital Gains?
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Questions and Answers

What is the subjective approach to interpreting the meaning of an amount received for one's own benefit in the context of illegal earnings?

  • An amount received with the intention to benefit from it (correct)
  • An amount received that is immediately repaid
  • An amount received that is donated to charity
  • An amount received that is not intended for personal benefit

    • According to the interpretation that an amount is accrued to a person when that person is entitled to it, what should be included in the current year/1st year of assessment if the total amount is payable in two successive tax years with the first payment payable in the current year of assessment?

  • The whole amount (correct)
  • The first payment only
  • The balance only
  • The total amount should be split evenly between the two tax years

    • In the case of MP Finance Group CC v CSARS 2007 (5) SA 521, what was the taxpayer's involvement in the illegal earnings?

  • The taxpayer was a victim of an illegal pyramid scheme
  • The taxpayer reported the illegal earnings to the authorities
  • The taxpayer received ill-gotten gains (correct)
  • The taxpayer was not involved in the illegal earnings

    • What is the conclusion of the approach that the receiver of ill-gotten gains could not be said to have received the money?

    <p>The receiver is immediately obligated to repay the money</p> Signup and view all the answers

    What is the definition of gross income according to section 1 of the Income Tax Act?

    <p>The total amount of cash or other assets received by a person during the tax year, excluding capital gains</p> Signup and view all the answers

    What is the difference between gross income for residents and non-residents?

    <p>Gross income for residents includes all amounts received or accrued to during the tax year, while gross income for non-residents is limited to amounts from a source within the Republic</p> Signup and view all the answers

    What happens if a taxpayer has no gross income or taxable capital gains?

    <p>They are not required to file an income tax return</p> Signup and view all the answers

    What is excluded from gross income according to the definition in section 1 of the Income Tax Act?

    <p>Receipts or accruals of a capital nature during the tax year of assessment</p> Signup and view all the answers

    What is the definition of gross income in income tax law?

    <p>Gross income may include any property earned by the taxpayer whether corporeal or incorporeal</p> Signup and view all the answers

    What is the significance of the phrase 'received by' in income tax law?

    <p>It indicates that the taxpayer has received the amount on his or her own behalf and for his or her own benefit</p> Signup and view all the answers

    In Geldenhuys v CIR (1947) 3 SA 256, what was the ruling on whether an amount received as an agent or trustee forms part of the gross income of that agent or trustee?

    <p>It does not form part of the gross income of that agent or trustee</p> Signup and view all the answers

    What was the ruling in the case of Stander v CIR (1997) 59 SATC 212 regarding a prize awarded to the taxpayer?

    <p>The prize was not considered an amount within the definition of gross income because it could not be converted into money or cash</p> Signup and view all the answers

    What is the historical stance of the judiciary on whether receipts/accruals from illegal activity should be included when calculating taxable income?

    <p>Some courts have followed an objective approach and some have followed a subjective approach</p> Signup and view all the answers

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