• How to calculate a capital loss

    Attention

    Warning:

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

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    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, including stamp duty and legal costs. He sold it for $90,000 in November 2006. 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 capital works deductions

    $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 2006, 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 2005

    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

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

    Attention

    Reduced cost base

    You cannot index a reduced cost base.

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    Last modified: 06 Oct 2009QC 27893