Hi All I currently have a capital loss of about $200k incurred from share trading (hobby not professional trader) that I am carrying forward in to future years to hopefully offset against future capital gains. Question I have is if I do a property development by lets see buying a PPOR and then develop that PPOR and make for example $200k profit on the whole project, am I able to offset the $200k capital loss against that $200k capital profit?? Are there any eligibility criteria I need to achieve in order to do the above, ie maybe have to hold the PPOR for a period of time (ie 12 months) or something like that etc? Any advice would be appreciated and of course I will speak to my Accountant too but thought I'd ask the question on here too. Thanks in advance.
Not a bean counter... Development might be considered a business activity and profit would be taxed as regular income vs a capital gain which is from passive investment.
only capital gains can offset capital losses. So if the development is on revenue account then it won't.
Thanks not quite sure what it means to be honest when you mean if the development is on revenue. I always though capital losses to can be carried forward in to future years to be offset against capital gains?
Yes, but profits from a development might not be capital gains, but ordinary income (like income from a business, for example).
Tax Tip 143: The sale of a property – Capital or Revenue account? Tax Tip 143: The sale of a property – Capital or Revenue account?
Thank you for the information, I will speak to my Accountant a little more as from memory he mentioned it could potentially happen but there were some conditions that needed to potentially be met first etc.
