Capital gains simplified
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Re: Capital gains simplified
Smile,
Both you and your wife need to see an accountant to handle all your yearly tax returns, that's the best piece of advice I can give to you.
If you have a mortgage, the interest payments become tax deductible, negative gearing.
Above that, is profit, as mentioned, you should split that income to alieviate bracket creep.
Then on the sale, capital gains kicks in, on purchase price, vrs costs to you for maintenance and up keep, the the remaining is taxed as profit.
THEN, there's land tax, there's no hiding from that either, again, on a sliding scale depending on value
As mentioned, the best thing you can do, is get an accountant ! No of far to many people that have been caught out thru ignorance, and the tax man
cares not who you are, they will find out and pursue you.
Col
Both you and your wife need to see an accountant to handle all your yearly tax returns, that's the best piece of advice I can give to you.
If you have a mortgage, the interest payments become tax deductible, negative gearing.
Above that, is profit, as mentioned, you should split that income to alieviate bracket creep.
Then on the sale, capital gains kicks in, on purchase price, vrs costs to you for maintenance and up keep, the the remaining is taxed as profit.
THEN, there's land tax, there's no hiding from that either, again, on a sliding scale depending on value
As mentioned, the best thing you can do, is get an accountant ! No of far to many people that have been caught out thru ignorance, and the tax man
cares not who you are, they will find out and pursue you.
Col
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Re: Capital gains simplified
Thanks that explains it alot clearerskouta wrote:This is not financial advice...
I am going through a Capital Gains event now.
In your example if it is an Investment Property.
Bought for $245K
Sold for $400K
Capital Gain = $155K
Less 50% Discount if held property for over 1 year = $77.5K
Less, Insurance, Interest, Rates, Maintenance, Repairs, legal costs and possibly more.
Let's say this dropped it down to $50K after you remove all of the above deductible expenses.
If the property is in one name then the $50K would be declared income and added to your income tax, if 2 names the $50K would be split to $25K extra each declared in your incomes.. So if it was only in one name and you were earning and paying tax normally on $100K you would add the $50K for this tax year and would therefore be earning $150K and paying income tax on the full $150K.
So you keep some of the sale money aside as it can be next year you will be doing your tax.
I'm not an accountant but this is what my accountant has told me as we are going through this at the moment. Speak to your accountant this is nothing new for them...
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Re: Capital gains simplified
Will do thanksblacklab99 wrote:Smile,
Both you and your wife need to see an accountant to handle all your yearly tax returns, that's the best piece of advice I can give to you.
If you have a mortgage, the interest payments become tax deductible, negative gearing.
Above that, is profit, as mentioned, you should split that income to alieviate bracket creep.
Then on the sale, capital gains kicks in, on purchase price, vrs costs to you for maintenance and up keep, the the remaining is taxed as profit.
THEN, there's land tax, there's no hiding from that either, again, on a sliding scale depending on value
As mentioned, the best thing you can do, is get an accountant ! No of far to many people that have been caught out thru ignorance, and the tax man
cares not who you are, they will find out and pursue you.
Col
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- Bluefin
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Re: Capital gains simplified
That’s well explained and easy to comprehend.skouta wrote:This is not financial advice...
I am going through a Capital Gains event now.
In your example if it is an Investment Property.
Bought for $245K
Sold for $400K
Capital Gain = $155K
Less 50% Discount if held property for over 1 year = $77.5K
Less, Insurance, Interest, Rates, Maintenance, Repairs, legal costs and possibly more.
Let's say this dropped it down to $50K after you remove all of the above deductible expenses.
If the property is in one name then the $50K would be declared income and added to your income tax, if 2 names the $50K would be split to $25K extra each declared in your incomes.. So if it was only in one name and you were earning and paying tax normally on $100K you would add the $50K for this tax year and would therefore be earning $150K and paying income tax on the full $150K.
So you keep some of the sale money aside as it can be next year you will be doing your tax.
I'm not an accountant but this is what my accountant has told me as we are going through this at the moment. Speak to your accountant this is nothing new for them...
Cheers :thumbsup:
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Re: Capital gains simplified
It was.just to get.peoples idea and to think of things i havent think of.
Everything needs to be confirmed with accountant and my financial planner.
I just like to get most of my egg strait so i can work what i wamt to do before i tslk to anyone officially
Everything needs to be confirmed with accountant and my financial planner.
I just like to get most of my egg strait so i can work what i wamt to do before i tslk to anyone officially
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Re: Capital gains simplified
Yep go and see an account. I would also suggest going to see a financial adviser.
Pick one that is independent charges by the hour and doesn't receive kick backs.
Pick one that is independent charges by the hour and doesn't receive kick backs.
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Re: Capital gains simplified
frozenpod wrote:Yep go and see an account. I would also suggest going to see a financial adviser.
Pick one that is independent charges by the hour and doesn't receive kick backs.
Let me know if you can find one like that !
Mine charges in increments of 30 seconds, by the size of his invoice
Don't know about kick backs, but my last accountant tried to access loan funds that were for an off the plan factory i was purchasing,
He sure got a kick back when I caught him...........
Col
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Re: Capital gains simplified
Bought for $245K
Sold for $480K
Capital Gain = $235K
Less 50% Discount if held property for over 1 year = 117k
Less, Insurance, Interest, Rates, Maintenance, Repairs, legal costs and etc
You say i can claim interest
So roughly $1000 interest per month x 8 years =96k but rent covered that
Or interest over the mortgage income when not rented out 15k
Rates over 8 years roughly 11k
Insurance 5k
Maintenance over 8 years 20k
Samp duty and conveyancing when buying 12k
Selling cost 15k maybe lol
Thats about 78k with interest of possible 9k
And sure theres more
So 117k - 78= 36k cgt
Is that correct?
Sold for $480K
Capital Gain = $235K
Less 50% Discount if held property for over 1 year = 117k
Less, Insurance, Interest, Rates, Maintenance, Repairs, legal costs and etc
You say i can claim interest
So roughly $1000 interest per month x 8 years =96k but rent covered that
Or interest over the mortgage income when not rented out 15k
Rates over 8 years roughly 11k
Insurance 5k
Maintenance over 8 years 20k
Samp duty and conveyancing when buying 12k
Selling cost 15k maybe lol
Thats about 78k with interest of possible 9k
And sure theres more
So 117k - 78= 36k cgt
Is that correct?
Last edited by smile0784 on Sat Aug 18, 2018 8:28 am, edited 1 time in total.
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Re: Capital gains simplified
My financial advisor works out of the same office block as my account and seen him few times now and he hasnt billed me.blacklab99 wrote:frozenpod wrote:Yep go and see an account. I would also suggest going to see a financial adviser.
Pick one that is independent charges by the hour and doesn't receive kick backs.
Let me know if you can find one like that !
Mine charges in increments of 30 seconds, by the size of his invoice
Don't know about kick backs, but my last accountant tried to access loan funds that were for an off the plan factory i was purchasing,
He sure got a kick back when I caught him...........
Col