You are required to compute:

These are costs directly related to the disposal of the property.

$$\begin{align*} \text{Cost of advertising} &= \text{N}37,500 \\ \text{Fees and commissions} &= \text{N}425,000 \\ \text{Transfer and conveyance fees} &= \text{N}75,000 \\ \text{Total Selling Expenses} &= \text{N}37,500 + \text{N}425,000 + \text{N}75,000 \\ &= \text{N}537,500 \end{align*}$$

This is the sales proceeds less the total selling expenses.

$$\begin{align*} \text{Sales proceeds of duplex} &= \text{N}6,750,000 \\ \text{Net Sales Proceeds} &= \text{N}6,750,000 - \text{N}537,500 \\ &= \text{N}6,212,500 \end{align*}$$

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.

$$\begin{align*} \text{Original acquisition cost} &= \text{N}2,500,000 \\ \text{Cost of renovation} &= \text{N}250,000 \\ \text{Adjusted Cost of Acquisition} &= \text{N}2,500,000 + \text{N}250,000 \\ &= \text{N}2,750,000 \end{align*}$$

Capital gains are the difference between the net sales proceeds and the adjusted cost of acquisition.

$$\begin{align*} \text{Capital Gains} &= \text{Net Sales Proceeds} - \text{Adjusted Cost of Acquisition} \\ &= \text{N}6,212,500 - \text{N}2,750,000 \\ &= \text{N}3,462,500 \end{align*}$$

The capital gains tax is 10% of the capital gains.

$$\begin{align*} \text{Capital Gains Tax} &= 10\% \times \text{Capital Gains} \\ &= 0.10 \times \text{N}3,462,500 \\ &= \text{N}346,250 \end{align*}$$

The computations are:

• Capital Gains: $\boxed{\text{N}3,462,500}$
• Capital Gains Tax: $\boxed{\text{N}346,250}$