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Renaldo sold 2 acres for 92000 . Renaldos wifes father had originaly purchased 3 acres of land for 19500 .he died on 17 june 2008 and the land was inherited by Renaldos wife .on that date 3 acres of land was valued at 28600 ..unsold acre is 38000 .
in the formula when calculating the cost .. it is 28600 ( 92000/92000+38000) .. why are we using 28000 as the cost and not the 19500 amount ..please advise..thanks .
As Ronaldo wife inherited the land from her father, and it was valued 28600 at the time she has inherited, and just presume she must have paid inheritance tax on it or may be it was within the Nil Rate Band of Ronaldo’s wife father.
So, in the other words she has received the land at the cost of £28,600. not £19,500 as it was originally bought by her father.
i hope it make sense.
ooh.. yess understood now..thanks ^_^