Answer:
c. The capital loss arising from the sale of the vehicle is disregarded as it is a personal use asset.
Explanation:
Elizabeth sold her Audi A5 for R280,000, and she originally bought it for R500,000. Now, we need to figure out the correct statement regarding the sale of her vehicle.
Statement a says that the taxable capital gain from the sale of the vehicle is R104,000. To calculate the capital gain, we subtract the original purchase price from the selling price. So, R280,000 - R500,000 equals a loss of R220,000, not a gain of R104,000. Therefore, statement a is incorrect.
Statement b says that the assessed loss carried forward to the following year is R260,000. This statement doesn't align with the information provided. Elizabeth actually sold her vehicle for less than what she bought it for, so there is a loss. However, the loss is R220,000, not R260,000. Therefore, statement b is also incorrect.
Statement c mentions that the capital loss arising from the sale of the vehicle is disregarded as it is a personal use asset. This statement is partly correct. Generally, capital losses on the sale of personal-use assets, like a personal vehicle, are not deductible for tax purposes. So, statement c is correct.
Lastly, statement d claims that the taxable capital gain from the sale of the vehicle is R260,000. This statement is incorrect because, as we discussed earlier, there is a capital loss of R220,000, not a gain. Therefore, statement d is also incorrect.
Therefore, the correct statement is c. The capital loss arising from the sale of Elizabeth's vehicle is disregarded as it is a personal use asset.
Hope this helps!