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  • Step 2-Work out the cost base of your asset

    Attention

    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

    The cost base of your asset is what your asset cost you, including the incidental costs of buying, selling, maintaining and preserving it.

    The cost base for an asset such as a share or unit may also need to be reduced by the amount of any non-assessable payment you receive from the company or fund. This is explained below.

    Interest you have paid on money borrowed to buy shares or units will not form part of your cost base if you have claimed a deduction in any income year.

    For shares, the cost base is usually the cost of buying the shares, including brokerage and stamp duty.

    Example

    Fred had bought his 1000 shares at $5 each ($5000).He was charged $50 for brokerage and paid duties of $25.

    The cost base of his shares is $5000+$50+$25 =$5075.

    Note:

    There are certain circumstances where a cost base may be indexed. This is called the indexation method and the cost base would then become an 'indexed' cost base. For more information, see part A of this guide or have a look at the worked examples in chapter B2.

    Last modified: 06 Oct 2009QC 16182