1887

n Professional Accountant - You've got mail : accounting inbox

Volume 2012 Number 1
  • ISSN : 1680-7537

Abstract

I refer to the 'Accounting Inbox' question (Professional Accountant, Dec/Jan 2011) relating to Sale of Member's Interest. I don't quite understand the accounting treatment. What should happen when one member buys out another member is nothing in the CC! The transaction is between two members surely. The outgoing member sells his 50% share to the remaining member. Assuming his member contribution is R50, his loan account in credit of R100,000 and he sells his 50% for R200,000, he in fact makes a capital gain of R200,000 - R100,000 - R50 = R99,950, which he must declare as a capital gain in his tax return. The remaining member acquires 50% contribution to take him up to 100% as well as the outgoing guy's loan account.

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/content/account/02/1/EJC16552
2012-02-01
2019-11-17

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