Common CGT Mistakes

Discussion in 'Accounting & Tax' started by [email protected], 28th Oct, 2019.

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  1. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    18,445
    Location:
    Sydney
    Property
    - Poor date records
    - No record of third element costs and a change of circumstance occurs permitting this basis
    - s118-192 to reset the costbase not applied or incorrectly applied
    - CGT costs prior to s118-192 added to costbase
    - No record of cgt costs for buying and selling factored into calculations (if permitted)
    - Pre-1997 property. Owner incorrectly addsback QS deductions to costbase
    - Main residence exemption applied incorrectly (several ways)
    - Main residence choice when not entitled
    - Spouse / partner etc both claim a main residence
    - Errors re ownerhip on title. ie TIC 21/99% and tax reporting is 50/50. Legal ownership is ignored to produce a tax benefit
    - Reported when settled
    - Fail to consider other exemptions eg compulsory acquisitions, marital split
    - Fail to consider small business for fear that the taxpayer operates a business when they have a company and this does not trigger a issue
    - Lack of records eg Estimates are used. Fails substantiation in a audit
    - Selling off part of the lot on which the main residence is sited. This is NOT tax free.
    - Claiming 100% of foreign tax credits when a sale of foreign property is taxed in that country. Only 50% may be eligible.

    Shares and other investments
    - Failure to adjust costbase for return of capital, deferred distributions and AMIT adjustments incl in tax reports
    - Use of the cash basis for ETF and managed funds (trusts / stapled sec etc)
    - Not using annual tax report data for ETF and managed funds (trusts / stapled sec etc)
     
    craigc likes this.