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Edited version of private ruling
Authorisation Number: 1011538870160
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Ruling
Subject: capital gains tax (CGT) and capital losses
Will the carried forward net capital loss for the year ended 30 June 2010 be the sum of the 2008-09 net capital loss and the 2009-10 capital loss?
No.
This ruling applies for the following periods
Year ended 30 June 2010
The scheme commenced on
1 July 2009
Relevant facts and circumstances
This ruling is based on the facts stated in the description of the scheme that is set out below. If your circumstances are materially different from these facts, this ruling has no effect and you cannot rely on it. The fact sheet has more information about relying on your private ruling.
You made a capital gain in the 2008-09 year of income.
You reported carried forward capital losses in the 2008-09 year of income.
You expect to have a capital loss and a capital gain for the 2009-10 year of income.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 102-5
Income Tax Assessment Act 1997 Section 102-10.
Reasons for decision
Generally, you make a capital loss as a result of a CGT event if you received less capital proceeds for an asset than its reduced cost base. You made a capital loss when you reorganised your share portfolio.
Capital losses are applied to any capital gains that are made in the same income year. Any unapplied net capital losses can be carried forward and applied against any capital gains that have been made during the next income year, and so on, until they have been applied against future capital gains.
Therefore, you cannot choose when you apply your capital losses. The capital losses should be applied to any capital gain that you made in the same income year that the capital losses occurred. If you have any unapplied capital losses, they can be carried forward to future years until they have been fully applied.
In your situation, you had carried forward capital losses in the 2008-09 year of income. You have a capital loss and expect a capital gain in the 2009-10 year of income.
Your carried forward capital losses for the 2009-10 year of income is the sum of the losses carried forward from the 2008-09 year of income plus your current year capital loss less your current year capital gain.
You will need to complete the TaxPack 2010 supplement. Section 18 in the Income section relates to CGT. Page 14 of the tax return for individuals supplementary section allows you to record your capital gain at label "G", mark the "yes" box with an "X". Your total current year capital gains are recorded at label "H". Your net capital losses carried forward to later income years is recorded at label "V".
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