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How to calculate a capital loss

Last updated 12 July 2020

Generally, you make a capital loss if your reduced cost base is greater than your capital proceeds. The excess is your capital loss.

Start of example

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 2007. 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

 

End of example
Start of example

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 2007, 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

Calculation element

Amount

Reduced cost base

$2,575

Capital proceeds 800 × $2.50

$2,000

Capital loss

$575

 

End of example

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.

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