Answered: Explain the tax treatment for the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A 5

Explain the tax treatment for the following transactions under article (9) of the income tax law

Tax payer has personal asset valued at SAR 100,000 a cost base of SAR 80,000. Earning gains of SAR 20,000. What is the gain or loss on the disposed asset?

Answer:

2.Tax payer has an asset of two components and he disposed one component for SAR 50,000 Cash. The tax payer purchased that asset for SAR 100,000 Cash 5 years ago. The expert valued that assets at the time of purchase for SAR 200,000 out of which SAR 70,000 was belong to the disposed component. What is the gain or loss on the disposed asset?

Answer:

3.Tax payer possess land with book value of SAR 100,000 and he paid SAR 20,000 Cash to improve the land. Are expenses deductible?

Answer:

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