• ### How to calculate a capital loss

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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 14: Calculating a capital loss - Antonio

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 2008. 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 15: Calculating a capital loss - Chandra

In July 1996, Chandra bought 800 shares at \$3 per share. He incurred brokerage and stamp duty of \$100. In December 2008, 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 2007 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.

 Reduced cost base You cannot index a reduced cost base.