PTI Inc., located in a country which has a capital gains tax, conducted the following transactions: a. Purchased a building in February 2018 for $26,000,000. In March 2019, the company spent $2, 800,000 to install solar panels for electricity in the building. The building was sold for $40,000,000 in 2021. The annual maintenance cost was $500,000. The cost of advertising the sale of the building and the legal fees amounted to $1,200,000. b. A motor vehicle was purchased for $5 million on January 1, 2018. The vehicle was sold in 2021 for $4.5 million. c. Bought an antique painting for $3.5 million in 2019. The painting was sold in 2021 for 1 million. d. Purchased a government bond for $5,000,000 in 2018 and sold it for $7,500,000 in 2021. The company is entitled to Annual Exemption of $500,000. Capital losses as at 1 January 2021 was $3,500,000. Calculate the capital gains tax in 2021, assuming a capital gains tax of 20%.
PTI Inc., located in a country which has a
transactions:
a. Purchased a building in February 2018 for $26,000,000. In March 2019, the
company spent $2, 800,000 to install solar panels for electricity in the building. The
building was sold for $40,000,000 in 2021. The annual maintenance cost was
$500,000. The cost of advertising the sale of the building and the legal fees
amounted to $1,200,000.
b. A motor vehicle was purchased for $5 million on January 1, 2018. The vehicle was
sold in 2021 for $4.5 million.
c. Bought an antique painting for $3.5 million in 2019. The painting was sold in 2021
for 1 million.
d. Purchased a government bond for $5,000,000 in 2018 and sold it for $7,500,000 in
2021.
The company is entitled to Annual Exemption of $500,000. Capital losses as at 1 January
2021 was $3,500,000.
Calculate the capital gains tax in 2021, assuming a capital gains tax of 20%.
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