Cgt Calculation

Topics: Property, Ownership, House Pages: 3 (758 words) Published: March 30, 2013
Question 1
There is a time table about John:
01/03/1996| Purchase | $100,000.00 | Burwood|
01/07/2011| Purchase | $300,000.00 | Camberwell| 01/09/2011| Declared this house to be his main residence|  | Camberwell| 30/12/2011| Post to New York, rent property|  | Camberwell| 01/03/2012| Sell| $175,000.00 | Burwood|

30/12/2016| Back to Melbourne|  |  |
01/02/2017| Sell| $500,000.00 | Camberwell|

The CGT consequences of these events must process as follow: Property at Burwood
Step 1 - has he made a capital gain or loss?
Step 1. has he made a capital gain or loss?| BURWOOD| CAMBERWELL| | | |
Question 1. | Has a CGT event happened to the taxpayer?| Disposals | [s104-A]| Disposals | [s104-A]| Question 2.| Is the asset a CGT asset?| land and buildings| [s108-5]| land and buildings| [s108-5]| Question 3.| Does an exception or exemption apply?| No*| [s 118-100] [s118-100]| Yes**| [s 118-100] [s118-100]| Question 4.| Can there be a roll-over?| No| [s112-115]| No| [s112-115]| * In this question, this property is not the main residence during the whole of the ownership period **

Step 2 – work out amount of capital gain or loss

Step 1 - has he made a capital gain or loss?
Because the Burwood residence was John’s main residence and it had not been used for income- producing purposes, ITAA97 s118-140 allows John to treat both the Burwood and Camberwell residences as his main residence for a period of six months prior to the date of disposal of the Burwood home on 1/05/2011(01/05/2012). Under s118-130, where land or a dwelling which is the taxpayer’s main residence is acquired or disposed of under a contract and legal ownership does not pass until a later time, then CGT is to be calculated on the basis of legal ownership. The basis of legal ownership is usually when the contract for acquisition and disposal is completed. In John’s case this...
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