That would really depend upon how I would plan to save money my selling or buying something but when I sold my house they was no profit to me as everything was adjust in renovating my home which means that I got the same amount on selling.
Andrew totally agree an Option Agreement can certainly work for a purchaser but of course is the reverse for the Vendor of the property especially if it is an IP.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Lets say you bought a house for $200,000 and after stamp duty and reno costs it owes you $220,000 and then you sell it after a couple of years for say $300,000 and make a $80,000 profit on that property less 50% = $40,000 taxable CGT
Now lets say you made a loss on the books in the previous year for say $100,000, would the accountant then carry the loss into the new year and right off that $40,000 so that you pay no tax on that capital gain?
Or do you still pay tax on the $40,000 as its own standalone CGT profit?keiko wrote:Lets say you bought a house for $200,000 and after stamp duty and reno costs it owes you $220,000 and then you sell it after a couple of years for say $300,000 and make a $80,000 profit on that property less 50% = $40,000 taxable CGT
Now lets say you made a loss on the books in the previous year for say $100,000, would the accountant then carry the loss into the new year and right off that $40,000 so that you pay no tax on that capital gain?
Or do you still pay tax on the $40,000 as its own standalone CGT profit?Anyone?
keiko wrote:Lets say you bought a house for $200,000 and after stamp duty and reno costs it owes you $220,000 and then you sell it after a couple of years for say $300,000 and make a $80,000 profit on that property less 50% = $40,000 taxable CGT
Now lets say you made a loss on the books in the previous year for say $100,000, would the accountant then carry the loss into the new year and right off that $40,000 so that you pay no tax on that capital gain?
Or do you still pay tax on the $40,000 as its own standalone CGT profit?As an individual a capital loss can only be offset by a capital gain, therefor when a capital loss is declared for a particular income year on your tax return. It must be carried forward to future year's where it can offset future Capital Gains.
E.G.
Say I bought an investment property in 2005-2006 (Financial Year) for $600,000. I then sold it in 2007-2008 (Financial Year) but only recieved $500,000. Therefore for the 2007-2008 (Financial Year) I would declare a Capital Loss of $100,000, which I would have to carry forward.
Now in the 2007-2008 (Financial Year) I bought another property for $400,000. And sold it in 2010-2011 (Financial Year) for $450,000. That is $50,000 in Capital Gains for which a 50% discount is applied (due to holding >12montsh), so $25,000.
Now when I sit down and do the tax that year I would declare a Capital Gain of $25,000. This would however be offset by the capital loss ($100,000) carried forward from previous years. So +$25,000 – $100,000 = -$75,000.
Therefor I pay no tax on the capital gain that year and continue to carry forward the new capital loss figure of $75,000.Can I claim the stamp duty back when I sell the IP? Or the Stamp Duty gets lost?
Mosqui wrote:Can I claim the stamp duty back when I sell the IP? Or the Stamp Duty gets lost?Yes, It's added to the cost base along with all other acquisition costs for determing capital gain when you sell the property.
e.g. You bought the property for $500K, Stamp Duty was $20K, Other Capital Costs were $10K, you got $600K for selling after sales costs.
So the cost base for capital gain is $500K + $20K + $10K = $530K.
Capital Gain is $600K-$530K = $70K.bumskins wrote:keiko wrote:Lets say you bought a house for $200,000 and after stamp duty and reno costs it owes you $220,000 and then you sell it after a couple of years for say $300,000 and make a $80,000 profit on that property less 50% = $40,000 taxable CGT
Now lets say you made a loss on the books in the previous year for say $100,000, would the accountant then carry the loss into the new year and right off that $40,000 so that you pay no tax on that capital gain?
Or do you still pay tax on the $40,000 as its own standalone CGT profit?As an individual a capital loss can only be offset by a capital gain, therefor when a capital loss is declared for a particular income year on your tax return. It must be carried forward to future year's where it can offset future Capital Gains.
E.G.
Say I bought an investment property in 2005-2006 (Financial Year) for $600,000. I then sold it in 2007-2008 (Financial Year) but only recieved $500,000. Therefore for the 2007-2008 (Financial Year) I would declare a Capital Loss of $100,000, which I would have to carry forward.
Now in the 2007-2008 (Financial Year) I bought another property for $400,000. And sold it in 2010-2011 (Financial Year) for $450,000. That is $50,000 in Capital Gains for which a 50% discount is applied (due to holding >12montsh), so $25,000.
Now when I sit down and do the tax that year I would declare a Capital Gain of $25,000. This would however be offset by the capital loss ($100,000) carried forward from previous years. So +$25,000 – $100,000 = -$75,000.
Therefor I pay no tax on the capital gain that year and continue to carry forward the new capital loss figure of $75,000.Thanks for the reply.
Would this also be the same if It was in a company?
And lets say the same company made a loss due to a non property related transaction, (lets say the loss was $50,000) Can this also be carried forward to reduce tax on a capital gains on a property sale? lets say the capital gain on the property sale was $50,000.
Would this then mean there is $0.00 tax to pay or can it only be property related capital gains and losses that are taken into account or can it be anything that is related to me and my companies etc?Thanks
It is not a good idea to buy property through a company. Losses can be carried forward, but there is no 50% CG discount.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Terryw wrote:It is not a good idea to buy property through a company. Losses can be carried forward, but there is no 50% CG discount.Thanks Terry
For what I'm trying to achieve it should be ok if what I was asking is possibleI don't claim to be an expert on CGT, however I do want to point out that I did like these 2 options as mentioned above:
1) "It may be possible to reduce your taxable income by making a deductible contribution to your superfund, and this will therefore reduce the CGT payable"
AND
2) sell the property and hence get the CGT during a low income year (especially a year in which you may lessen your work and income)
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