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1. Completely Capital Gains (CG) exempt - depreciation not considered.
2. Calculate CG as if fully taxable including allowing for the value of depreciable items at start and end, then apportion the gain to establish the taxable CG, then apply the 50% general CG discount on the reduced apportioned amount i.e. 50% of 1/7th.
Thanks Gary, so in scenario 2:
Tax payable = 60k (profit + dep) x 1/7 x 50% x 0.37(depending on tax bracket) = approx $1585
Tax payable = 60k (profit + dep) x 1/7 x 50% x 0.37(depending on tax bracket) = approx $1585
Hi All
Need some help please. I thought I had the six month rule sorted out but on advice of friend am now not so sure.
Our situation is:
Purchased PPR in Canberra in March 2007 ($618K)- we lived in it for 4-6 months and then work took us to Sydney. (property was probably valued at $618K)
We have rented the property out since then (June 07) and have not owned any other PPR until now - Sep 2014.
We have declared rent and deductions of interest and expenses etc and paid tax on the positive return.
I thought that we simply got the property valued at the six year mark (ie six years after we moved out - $734K) and that then became the base for any potential future capital gain. ie the capital gain between the valuation when we moved out and at the end of the six year period, was CGT free.
Is it as simple as I understand or are there implications of us not moving in or selling before the six year period is up?
Would appreciate someone's opinion or advice?
Cheers
My question relates to a temporary absence. What does the ATO count as a genuine reason for a temporary absence? I know extended overseas holiday, moving for a temporary job transfer, study overseas or staying with a sick relative are given as examples. Do the ATO expect a genuine reason for moving out or can I temporarily move out for any reason? Note that I would need to rent out my house if I moved out to afford the repayments on the loan.
The legislation doesn't care about reasons.