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profit declared as income?

Discussion in 'Accounting & Tax' started by Fernfurn, 3rd Jul, 2016.

  1. Fernfurn

    Fernfurn Active Member

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    I am retired and live off rental income and If I bought a house after Dec , purely as investment (in other words still live in our own home) renovated it and resold before November the next year (therefore no land tax), could I just add any profit to my income? If so, how would I state this on the tax form?
     
  2. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    I'm not an accountant so wont comment on that. Was thinking though, if you hold the property for at least 12 months your sale will be subject to 50% CGT but if you sell within 12 months you won't have the 50% CGT discount applied. Will the land tax be more or less than your CGT discount?
     
    Last edited: 3rd Jul, 2016
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  3. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Yes it would be treated either as income or a capital gain without the discount. In most cases the result will be the same - but if you have a carried forward capital loss the it would be different. Seek personal tax advice.
     
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  4. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    This intention of profit making usually means the acquisition is not held as a capital asset. Instead all the "profit" may be taxed.
     
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