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From: Susan Pope
Hi All,
In a lease option, I understand rent credit is a capital gain.
Ignoring expenses that would reduce CGT, is it the case that:
1. in year 1 of a 3 year lease option, any rent credit I receive as an option seller will be taxed at my full rate; and
2. in subsequent 2 years, rent credit will be taxed at half my full tax rate,
because by then asset has been held for more than 12 months?
Am I on the right track? (It doesn't feel like I am.)
Anyway, I'll continue.
What happens if optionholder doesn't exercise and an agreement had been made to refund a percentage of rent credit?
Also, what happens if I choose not to receive any rent credit for the 1st year - is that tax evasion according to the ATO??
Sorry if these are really dumb questions - I've been reading generally on LO's and not hunting down an LO-friendly accountant until I have an idea of what I'm talking about!
Regards,
Susan
Hi All,
In a lease option, I understand rent credit is a capital gain.
Ignoring expenses that would reduce CGT, is it the case that:
1. in year 1 of a 3 year lease option, any rent credit I receive as an option seller will be taxed at my full rate; and
2. in subsequent 2 years, rent credit will be taxed at half my full tax rate,
because by then asset has been held for more than 12 months?
Am I on the right track? (It doesn't feel like I am.)
Anyway, I'll continue.
What happens if optionholder doesn't exercise and an agreement had been made to refund a percentage of rent credit?
Also, what happens if I choose not to receive any rent credit for the 1st year - is that tax evasion according to the ATO??
Sorry if these are really dumb questions - I've been reading generally on LO's and not hunting down an LO-friendly accountant until I have an idea of what I'm talking about!
Regards,
Susan
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