# Another CGT Topic

Discussion in 'Accounting & Tax' started by Nem, 13th May, 2019.

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1. ### NemWell-Known Member

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Purchase price in 2000 \$500k
Valuation when became IP \$1,000,000 in 2010
Claimed another 5 years of PPOR, valuation \$1,200,000 in 2015
Sold \$1,400 in 2020

1a
10+5 years PPOR
5 years rented
Profit \$1,400,000-\$1,200,000 = \$200,000
200,000 * 50% = 100,000 Tax payable on \$100k

1b
10+5 years PPOR
5 years rented
Profit \$1,400,000-\$500,000 = \$900,000
900,000 * 50% = 450,000*25% Tax payable on \$112.5k

2.
Run Sole Trader business from home and claimed 20% of holding costs in 2009 only for 12 months

How would I calculate CGT payable on that 20%?
If I go with 1a, =100*20% divided with 1/20?

Thank you!

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3. ### NemWell-Known Member

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Thanks Terry, yes I actually followed your notes Just unsure how would I add sole trader part to that calculations? Can there be two calculations?

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Sole trader working from home might change nothing if small business cgt concessions are applied.

All the calcs are wrong.

Why are you getting a valuation done in 2015 when you moved back in. First used to produce income rule doesnt work that way.

Are you applying the main residence absence provisions ?

Last edited: 14th May, 2019
5. ### NemWell-Known Member

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Didn't move in, done valuation as thats when PPOR became IP
Why is all wrong??

It was used for business only 1 year and 5 years for rental

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What happened between 2000 and the date it became an IP in 2010 ? Im assuming you lived in it.

And then 5 years later after being an ip you move back in

7. ### NemWell-Known Member

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yes so 15 years PPOR

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Yes the calcs are wrong.

assuming small business concessions don\'t apply:
You bought for \$500k in 2000, and moved it
in 2009 cost base was reset to market value \$XX
2010 you move out and use the 6 year rule
2015 move back in - is it being used to produce income now?

9. ### NemWell-Known Member

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Moved out 2010 and used 6 year rule until 2015
Tenanted 2010-2020

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the facts are getting confusing now. above you said you move back in in 2015. so once you move out you never move back in again?

11. ### NemWell-Known Member

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sorry for confusion

Thats correct, once moved out never moved in back

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then there would be 2 calculations you need to do, as outlined in my post linked above, plus factor in the business use.

13. ### NemWell-Known Member

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So to summarise:
Purchase price in 2000 \$500k
Valuation when became IP \$1,000,000 in 2010 (claimed 5 year PPOR until 2015)
Sold \$1,400 in 2020
Hold 20 years, lived in there 10 years, 10 years rented but claimed 5 years as PPOR)

Capital Gain \$1,400,000 - \$1,000,000 = \$400,000

Then the 50% CGT discount \$400,000 x 50% = \$200,000

Only 5/20 of this would be taxable = \$50,000

PLUS "plus factor in the business use"

Is that correct?

Thanks

14. ### [email protected]Tax Accounting + SMSFBusiness Plus Member

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And third element costs may play a significant part in reducing the profit pre-apportionment. Its an area where tax advice is clever and in most cases I see we can idntify benefits the taxpayer cant see,

The above calc is quite incorrect. s118-192 market value is NOT to be used in your example for starters. In the period 2009-2010 the property had been a place of business o s118-192 is not eligible

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no

16. ### NemWell-Known Member

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Because of running a business for a short period of time there or something else please?

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wrong for a number of reasons

Terry_w likes this.
18. ### NemWell-Known Member

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What part am I misunderstanding??

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call @[email protected] your best bet

20. ### NemWell-Known Member

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