Hello Forum members - I am new to the Form and look forward to "meeting" other members! I have a question for all ye learn'ed folk.......
I am a 50% / 50% member of a CC. I paid for a building on the entity's property and therefore now have a R1.9 million credit loan account (CC owes me). Only other member has no loan account but has lifetime usufruct of the CC's property. Property is currently being sold for R2.5 million and being split equally between both members (for my contribution and for other member's usufruct) and is the CC's only asset. My portion of proceeds (R1,25 mill) will be deducted from my loan account leaving a balance of R650,000 which I have agreed to waiver as the CC has no further assets and will be deregistered after the sale and settlement.
How is the "write-off" of R650,000 entered in the books?
What tax implications from SARS relating to the member's waivered credit loan account?
To anyone out there willing to advise me, I thank you in anticipation. Karin