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AAFM GLO_CWM_LVL_1 Exam - Topic 4 Question 41 Discussion

R acquired a property by way of gift from his father in the previous year 1991-92 when its FMV was Rs. 3 lakh. The father had acquired the property in the previous year 1983-84 for Rs. 2 lakh. This property was introduced as capital contribution to a partnership firm in which R became a partner on 10/06/2011. The market value of the asset as on 10/06/2011 was 10 lakh, but it was recorded in the books of account of the firm at Rs. 8 lakh. Compute the capital gain chargeable in the hands of R.
A) Rs. 11,055/-
B) Rs. 7,040/-
C) Nil
D) Rs. 3,075/-

AAFM GLO_CWM_LVL_1 Exam - Topic 4 Question 41 Discussion

Actual exam question for AAFM's GLO_CWM_LVL_1 exam
Question #: 41
Topic #: 4
[All GLO_CWM_LVL_1 Questions]

R acquired a property by way of gift from his father in the previous year 1991-92 when its FMV was Rs. 3 lakh. The father had acquired the property in the previous year 1983-84 for Rs. 2 lakh. This property was introduced as capital contribution to a partnership firm in which R became a partner on 10/06/2011. The market value of the asset as on 10/06/2011 was 10 lakh, but it was recorded in the books of account of the firm at Rs. 8 lakh. Compute the capital gain chargeable in the hands of R.

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by Teddy at May 04, 2022, 08:40 PM

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Cathrine
10 months ago
Are you sure about those figures? They seem a bit off to me.
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Miriam
11 months ago
Totally agree, the recorded value is lower than the market value, so it makes sense.
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Stevie
11 months ago
Wait, so he doesn't get taxed on the full market value? That's surprising!
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Skye
11 months ago
I think the gain should be calculated from the FMV, right?
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Sherron
11 months ago
R's capital gain will be based on the difference between the FMV at the time of contribution and the recorded value.
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Billy
11 months ago
Hmm, I'm a bit unsure about the interest rate parity theory and how to apply it here. I'll need to review my notes and make sure I understand the concept before attempting this.
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Leonie
11 months ago
I feel like Statement 2 definitely makes sense—analyzing the industry life cycle seems important for investors.
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Raul
12 months ago
I remember something about calculating capital gains based on the cost of acquisition, but I'm unsure how the gift factor plays into it.
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