Working out Capital Gains Tax

Hi David,

Thanks for your post and welcome to the forum.

Please feel welcome to post more questions, and also replies, in the future.

You ask:

quote:

---

I’ve sold a property for $40,000 profit. I have owned it for more than a year.
I was told that I had to pay $10,000 in capital gains tax. (50% of half the profit) is this right?? or do I paid tax on 50% of half?

---

The correct treatment is to take half of the capital gain (in your case, $20,000) and include that in your personal income tax.

The amount of tax that you will pay will depend on what other income you have. If you are already on the top marginal rate, you will pay ($20,000 * 48.5%) of you capital gain in tax.

Please note that depending on when you purchased the property, you might find that the old method of indexation will give a better tax result.

See your tax adviser for more info.

Cheers,

Steve McKnight

**********
Remember that success comes from doing things differently.
**********