Forums / Getting Technical / Legal & Accounting / CGT on depreciation claimed after property sale

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  • Profile photo of Mack85nMack85n
    Participant
    @mack85n
    Join Date: 2018
    Post Count: 2

    Hi all,
    Could I please have some advice on CGT tax payable on depreciation any building costs after the sale of an investment property. I have recently sold a property and on this years tax return I have been advised that I will need to supply all tax returns that I have previously claimed any depreciation and building costs as these will need to be re-applied as capital gains to now be added and CGT payable after the sale of the property.
    Any advice on this would be great.

    Thanks,

    Profile photo of HouseofwealthHouseofwealth
    Participant
    @houseofwealth
    Join Date: 2018
    Post Count: 7

    correct. you need to do two things regarding depreciation.

    1. get a copy of the depreciation schedule
    2. work out the amount of Division 43 (capital works deductions) you have claimed or would have been able to claim since owning the property.
    3. take the purchase price and allocate it between the Division 40 and Low Value Pool Items and the land and buildings.
    4. take the sales price and allocate it between the Division 40 and Low Value Pool Items

    there is generally no balancing adjustment for the Division 40 and Low Value Pool Items

    Division 43 capital works are an adjustment to the cost base and will increase your capital gain on sale.

    Houseofwealth | HOUSE OF WEALTH
    http://www.houseofwealth.com.au
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    MELBOURNE PROPERTY ACCOUNTANTS

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