You are required to compute:

To compute the capital gains and capital gains tax, we need to determine the net sales proceeds and the adjusted cost of acquisition. Step 1: Calculate the total selling expenses. These are costs directly related to the disposal of the property. Cost of advertising &= N37,500 \\ Fees and commissions &= N425,000 \\ Transfer and conveyance fees &= N75,000 \\ Total Selling Expenses &= N37,500 + N425,000 + N75,000 \\ &= N537,500 Step 2: Calculate the Net Sales Proceeds. This is the sales proceeds less the total selling expenses. Sales proceeds of duplex &= N6,750,000 \\ Net Sales Proceeds &= N6,750,000 - N537,500 \\ &= N6,212,500 Step 3: Calculate the Adjusted Cost of Acquisition. This includes the original cost of the property plus any capital expenditure incurred to enhance its value. Depreciation, insurance premiums, and security/gardener wages are generally not deductible for capital gains tax purposes. Original acquisition cost &= N2,500,000 \\ Cost of renovation &= N250,000 \\ Adjusted Cost of Acquisition &= N2,500,000 + N250,000 \\ &= N2,750,000 Step 4: Calculate the Capital Gains. Capital gains are the difference between the net sales proceeds and the adjusted cost of acquisition. Capital Gains &= Net Sales Proceeds - Adjusted Cost of Acquisition \\ &= N6,212,500 - N2,750,000 \\ &= N3,462,500 Step 5: Calculate the Capital Gains Tax. The capital gains tax is 10% of the capital gains. Capital Gains Tax &= 10\% × Capital Gains \\ &= 0.10 × N3,462,500 \\ &= N346,250 The computations are: Capital Gains: N3,462,500 Capital Gains Tax: N346,250 Send me the next one 📸