Marge gets her CGT Calcs Wrong

Discussion in 'Accounting & Tax' started by Mike A, 2nd Jan, 2020.

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  1. Mike A

    Mike A Well-Known Member

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    Marge thought she needed a valuation when she moved into her investment property to minimise her CGT

    Marge was wrong

    Marge sells her main residence and moves into a rental property she has owned for 2 years.

    Marge's yoga friend Maude tells her that she needs to get a valuation done on the property when she moves into it. "That way Marge you might not pay any capital gains tax. If the property was worth $750k when you moved in and you sell it for the same price it doesn't matter what you paid for it. Isn't that sooo cool. Google knows everything"

    Marge thinks wow this is great. I purchased the property for $250k. I'll sell it. That's a $500k gain tax free. First Class World Round trip from Springfield coming right up.

    What Marge doesn't know is that Maude wasn't so smart after all. Marge does need to pay capital gains tax.
     
    craigc, wylie, ellejay and 1 other person like this.
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Marge has also wasted $500 on an unnecessary valuation in addition to the CGT!
     
  3. willair

    willair Well-Known Member Premium Member

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    Mike A and TAJ like this.
  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Marge best seek tax advice on how to minimise tax. Not on how to pay tax