MasterInvestor
28-03-2005, 10:31 PM
Hi
Could one of the accountants on the board please clarrify a question for me.
When a trust has a capital gain, is the 50% discount applied before or after distribution.
If before, if could help with saving losses.
eg. a person has a $100,000 capital loss. A $200,000 Capital gain would reduce this to $100,000 and then 50% discounted to $50,000.
But if the person set up a trust for future investments (looking long term), a $200,000 capital gain would be reduce to $100,000 and this would be distributed to the person with the loss, cancelling it out. saving up to $25,000 in tax!
I have a feeling that, after typing this, the discount would only apply after the gain was distributed!
Thanks
MI
Could one of the accountants on the board please clarrify a question for me.
When a trust has a capital gain, is the 50% discount applied before or after distribution.
If before, if could help with saving losses.
eg. a person has a $100,000 capital loss. A $200,000 Capital gain would reduce this to $100,000 and then 50% discounted to $50,000.
But if the person set up a trust for future investments (looking long term), a $200,000 capital gain would be reduce to $100,000 and this would be distributed to the person with the loss, cancelling it out. saving up to $25,000 in tax!
I have a feeling that, after typing this, the discount would only apply after the gain was distributed!
Thanks
MI