• ### How to calculate a capital loss

Warning:

This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

End of attention

Generally, you make a capital loss if your reduced cost base is greater than your capital proceeds. The excess is your capital loss.

Example

Antonio acquired a new income-producing asset on 28 September 1999 for \$100,000. He sold it for \$90,000 in November 2003. During the period he owned it, he was allowed capital works deductions of \$7,500. Antonio works out his capital loss as follows.

 Cost base \$100,000 less write-off deduction \$7,500 Reduced cost base \$92,500 less capital proceeds \$90,000 Capital loss \$2,500

Example

In July 1996, Chandra bought 800 shares at \$3 per share. He incurred brokerage and stamp duty of \$100. In December 2003, Chandra sold all 800 shares for \$2.50 per share. He incurred brokerage of \$75. He made a capital loss, calculated as follows.

Calculation of reduced cost base

Date expense incurred

Description of expense

Expense

July 1996

Purchase price

\$2,400

July 1996

Brokers fees and stamp duty

\$100

December 2003

Brokers fees

\$75

Reduced cost base

\$2,575

Calculation of capital loss

 Reduced cost base \$2,575 Capital proceeds 800 x \$2.50 \$2,000 Capital loss \$575

End of example

However, the reduced cost base is not relevant for some types of CGT events. In these cases, the particular CGT event explains the amounts to use (see appendix 1: Summary of CGT events).

Reduced cost base

You cannot index a reduced cost base.