Filling in the blanks to work out my CGT

[jennyn]

Here are all my figures to work out my CGT.

Purchase price: 89,000
stamp duty: 1,800
conveyancing: 1,112

Sell price: 210,000
Selling fees: 7,480
conveyancing: 1,200 (approx)

Are the mortgage fees I have to pay to pay out the loan included in my cost base? I haven't put them in yet in case they're not. And are mortgage application fees included in my cost base because I haven't put them in either.

I didn't get building depreciation as it was built before then but I did get a quantity surveyor's report for fixtures and fittings and used the report in my tax returns so do I have to pay the deductions back?

My yearly income is $42,522.

Jenny

 

[coastymike]

JennyN,

I always think that people should see their accountant re calculations because there are soo many questions that should be answered before making such a calculation. My fear is that some people seek free advice and then use this information for their tax returns and it is not correct. For example further information that would be required is :-

1. Are you trying to ascertain the CGT or total tax payable (including other assessable income) for a particular year. The fact you have provided your assesable income indicates that it may be latter.

2. How long has the asset been held for ? Less than 12 months or greater than 12 months. If less than 12 months it is not eligible for the 50% CGT concession.

3. Was the asset purchased prior to Sept 1985 or after Sept 1985 ? If purchased prior to Sep 1985 then it wil ordinarily be exempt from capital gains tax.

4. Is the asset held in your sole name, in joint names, a partnership or in a company ? If held in a company for example, you will not be eligible for the 50% CGT concession. If it is held in joint names or in a partnership then you would need to know the respective legal interests (e.g. is the property held 50/50 by yourself and your partner or in a different ratio ?) . If the property is held in different percentages then you would need to know the other parties taxable income to calculate the tax payable by that individual including the CGT liability (assuming that you are trying to calculate your tax liability in total). This is assuming you want to calculate total tax payable rather than the capital gains tax payable.

5. Did you make any capital improvements during the life of the asset and if so how much was the value of these improvements and how much depreciation has been calculated on these improvements ?

6. Was the property held in NSW and did you incur vendor stamp duty on the sale ? If so this will be added to the cost base of the asset.

7. Was the property held in the ACT and the stamp duty on the acquisition of the asset was treated as a deductible expense in the year of acquisition ?(most ACT land is leasehold land and therefore stamp duty on acquisition is deductible in the year of acquisition and not included in the cost base on disposal)

8. Was the property used as your main residence at any time during the period you held the asset ? If so you may be eligible for part exemptions and this will affect your CGT liability.

So many questions that an accountant could ask and answer for you. But remember at $200 per hour it will cost you.

I do appreciate you asking this question but I sometimes wonder whether people should be asking more general questions (e.g. Are the mortgage fees I have to pay to pay out the loan included in my cost base?). I think providing calculations without knowing the full facts is extremely dangerous. And as they say you always get what you pay for. Free advice is sometimes not worth much.

 

[Mry]

Here are all my figures to work out my CGT.

Purchase price: 89,000
stamp duty: 1,800
conveyancing: 1,112

Sell price: 210,000
Selling fees: 7,480
conveyancing: 1,200 (approx)

Are the mortgage fees I have to pay to pay out the loan included in my cost base? I haven't put them in yet in case they're not. And are mortgage application fees included in my cost base because I haven't put them in either.

I didn't get building depreciation as it was built before then but I did get a quantity surveyor's report for fixtures and fittings and used the report in my tax returns so do I have to pay the deductions back?

My yearly income is $42,522.

Jenny

Really, it is dangerous for us to give a quote to you on the CG you would be up for. Your accountant would know your situation and know all the factors that would adjust or change your situation. Hypothetically I could say $23,300.18 but there is no chance on earth that it would be that exact amount or that all the factors relating to the sale are taken into account.

Financing costs are witten off as a tax deduction.

Remember, with free advice, you get what you pay for.