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• The 'other' method of calculating your capital gain

The ‘other’ method is the simplest of the three methods for calculating a capital gain. You must use this method to calculate your capital gain if you have bought and sold your asset within 12 months or, generally, for capital gains tax (CGT) events that do not involve an asset.

Generally, to use the 'other' method, you simply subtract your cost base from your capital proceeds. The amount of proceeds left is your capital gain.

Example: Property purchased and sold within 12 months

Marie-Anne bought a property for \$250,000 under a contract dated 24 June 2019. The contract provided for payment of a deposit of \$25,000 on that date, with the balance of \$225,000 to be paid on settlement on 4 August 2019.

Marie-Anne paid stamp duty of \$5,000 on 20 July 2019. On 4 August 2019, she received an account for solicitor’s fees of \$2,000, which she paid as part of the settlement process.

Marie-Anne sold the property on 16 October 2019 (the day contracts were exchanged) for \$315,000. She incurred costs of \$1,500 in solicitor’s fees and \$4,000 in agent’s commission.

As she bought and sold her property within 12 months, Marie-Anne must use the 'other' method to calculate her capital gain.

 Deposit \$25,000 Balance \$225,000 Stamp duty \$5,000 Solicitor’s fees for purchase of property \$2,000 Solicitor’s fees for sale of property \$1,500 Agent’s commission \$4,000 Cost base (total) \$262,500

Marie-Anne works out her capital gain as follows:

 Capital proceeds \$315,000 less cost base \$262,500 Capital gain calculated using the ‘other’ method \$52,500

Assuming Marie-Anne hasn't made any other capital losses or capital gains in the 2019–20 income year, and doesn't have any unapplied net capital losses from earlier years, the net capital gain to be included on her tax return is \$52,500.

End of example

Next steps:

• You can use the Capital gain or capital loss worksheet to work out and compare your outcomes when using the discount and indexation methods, and to work out your capital gain or loss using the 'other' method.

See also:

Last modified: 01 Jul 2020QC 17164