I just wanted to check i hadn't missed anything. Your input would be appreciated. My wife purchased a residential block in 2006 for $185,000. stamp duty, legal costs, fees, etc added $6700. Over the next several years she capitalised $44,000 in holding costs. In late 2011 she transferred 90% of the ownership to me. Stamp duty and such cost $3000. In 2012 we built a house on it for $247,000. The house was let soon after. We have spent $6000 on capital expenditure since. I have claimed a total of $24,000 in depreciation of assets. If the house was sold today, it would likely yield $420,000 after selling fees, etc. So my cost base would be 0.9* (185000 + 3000 + 247000 + 6000) minus the $24000 i have claimed in depreciation. This would be subtracted from the net sale price $420000 to calculate capital gain? I'm in Western Australia
The market value of the transfer in 2011 is part of your cost base. You have two assets - a 50% share and an extra 40% share so it easier to track the cost base for each interest. For example, your first 50% interest gave you a cost base of 92.5k (185,000 x 50%) but the second interest of 40% is unaffected.
The vacant block would have been valued at the date of transfer of part to you, which also was a CGT event for your wife. Use that value in your calculations, not the original purchase price. Marg
Just treat it as owning 2 separate assets. Wife sold a property in 2011 You purchased a property in 2011.
The value of the land as defined by the state was much less than the market value at the time. Would a history of comparable sales from that time be authorative?
That is illogical. The value was equal to the value at that time. However a market always has a range. ie Buyers and sellers.
You should seek personal tax advice as the ATO would see an error as evasion / avoidance and impose penalties. PC isnt a place to run tax calcs. The cost will avoid that concern and provide you with a way to address penalties for recklessness if you get it wrong.
You own 90%....Your portion of the sales proceeds is $378,000. See the mistakes that can be made. The reported CGT values etc used in 2011 may influence the costbase also for your wife. In some instances the market value in 2011 may need to be substituted for the actual 2011 transfer value used. Her CGT outcomes will be different to yours and two assets must be calculated. Her 10% share has a costbase from 2004. Your 90% has a costbase from 2011 plus duty etc
