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 2009. 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 2009, 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.
End of attention