deduct rates from capital gain?

[coastal]

Hi guys

I have just sold a block of land, which I held for 2.5 years.

I am able to deduct the rates from the CG?

What about interest?...I bought the block to resell for profit.

 

[Aaron_C]

If you didn't deduct those costs from your income over the years then it would be added to the cost base to lower CGT.

 

[geoffw]

The ATO seems to indicate that these costs would be deductible.

Check that article to see if there are any other costs which you may be able to claim.

But see a professional to make sure you have covered everything properly.

 

[coastymike]

Aaron

thats not quite.accurate. if the costs are deductible under section 8-1 or another provision of the act and he hasnt claimed them then you need to amend your returns subject to the time limit either 2 or 4 years.

think you are referring to third element costs which relates to a property where the costs are not deductible and then they get added to the cost base.

if the costs are deductible and you didnt deduct they arent third element subject to the amendment periods

even the ato website makes it clear second and third element dont include costs you omitted to claim but could have.


http://www.ato.gov.au/General/Capit...s/Guide-to-capital-gains-tax-2012-13/?page=10

 

[geoffw]

CoastyMike

Coastal (any relation?) said that he bought to resell at a profit. As it is land which presumably has not been rented out, are there expenses which could have been claimed, rather than being added to the cost base?

 

[coastal]

Thanks for the help

I do my own tax returns, I will call the ATO tomorrow.. just to double check.

I bought 3 blocks for 35k and just sold them for 55 k...I had to pay interest and rates..I didn't make a loss. If I am able to claim back the costs..it would be sweet. They were initall supposed to be a quick flip..but it wasn't to be. I had about 5 contracts crash in the last 2 years.

Coastal

 

[coastymike]

Geoff

depends whether the land is trading stock or a capital asset. Intention to make a profit and resell sounds like trading stock to me but need all the facts to make a determination.