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Calculating Capital Gains and Losses

 

There are three methods that are used to calculate a capital gain: 

  • The indexation method;
  • The discount method; and
  • The ‘other’ method.

 

There is only one way to calculate a capital loss.

 

Situation Method of Calculating Capital Gain

Property acquired before 11.46am on 21 September 1999 and disposed of before 11.46am on 21 September 1999:

  • Property is owned for at least 12 months.

  • Property is owned by an individual, complying superannuation entity or trust.

Use indexation of the cost base method. Averaging of capital gain allowed.

Property acquired before 11.46am on 21 September 1999 and disposed of after 11.45am on 21 September 1999: 

  • Property is owned for at least 12 months.

 

  • Property is owned by an individual, complying superannuation entity or trust.

 

Taxpayer may either:

 

  • Use indexation of the cost base with indexation frozen at 30 September 1999. No averaging of capital gain allowed; or

 

  • Use the capital gains tax discount method.

You can reduce the nominal gain by one-half for individuals and trusts, and one-third for complying superannuation entities.

 

  • Property is not owned for at least 12 months.

 

For property that are owned for less than 12 months, neither the indexation option nor the capital gains tax discount option is available.

 

For individuals, averaging of capital gain is allowed but only for property purchased and disposed of before 11.46am on 21 September 1999.

 

  • Property held for 12 months but not owned by an individual or complying superannuation entity.
If the taxpayer is not an individual or complying superannuation entity, the indexation option is available for property acquired before 11.46am on 21 September 1999. No averaging of capital gain available.

 

Capital gains tax discount is not available.

 

 

 

Our dedicated team can assist you with queries relating to any capital gains or losses, as well as other legal and accounting matters. Complete and submit the Express Enquiry form on the top right hand side of this page and we will contact you to discuss your enquiry or call us on 1300 QUINNS (1300 784 667) +61 2 9223 9166  to arrange an appointment.