Hi guys, any help will be greatly appreciated.
Ok, land purchased dec 05 cost 141 k
House built and completed march 07 cost 121 k
Other expenses approx 25k
Sold April 07 425kAm I right to presume that as the building is a depreciable asset then I am allowed the discount capital gain on the full amount of sale
ie 425 – 141-121-25 = 138
discounted cgt 138*50% = tax payable on 69k??
Cheers, IanSpot on Ian well done!
The CGT of $69K will be added to your other taxable income. The 2007 rate is 31.5% for 25000 – 75000;41.5% 25001 – 150000 & 46.5% over 150000.
For example
Salary is $50000 + Cap Gain of $69000 = $119000 taxable incomeTherefore $25000 is taxed at 31.5% = 7575.00
and the balance of $44000 at 41.5%= 18260.00Therefore in this example you would pay a total of $25835 in CGT plus any other tax owing from the salary of $50000.
Hope this makes sense!
Thanks Amanda, my only doubt was the fact that I hadnt held the BUILDING for more than a year to claim the discount CGT.
Regards,
IanHi Ian,
My understanding is that Capital Gains is calculated from when the asset is first purchased. In this case this is the land back in Dec '05. The house is an improvement on that initial asset and forms part of the cost base. Probably worth giving your Accountant a ring to confirm though.
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