GST issues registers
Primary production industry partnership8. Capital gains tax
8.1.1 Capital Gains Tax upon the sale of assets which have been held for less then six months.
Question:
What is the income tax treatment of capital gains or losses on the sale of assets which have been held for less than 12 months?
Are capital losses carried forward or written off?
Answer and Explanation:
A capital gain on the sale of an asset held for less than 12 months is added to other capital gains you have made during the year. This amount is then reduced by any capital losses you have made during the year and by any unapplied capital losses from prior years.
For a capital gain made after 21 September 1999, the small business CGT concessions are available. If the conditions are satisfied the capital gain may be reduced or totally disregarded.
The net amount remaining after the application of losses and the small business concessions is included in your assessable income.
A capital loss can only be used to reduce a capital gain and not other income. Capital losses not used can generally be carried forward to a later income year and applied against capital gains in that year.
For further information please refer to:
Booklets:
- •
- Guide to Capital Gains Tax (NAT 4151_5.2001)
- •
- Capital Gains Tax Concessions for Small Business (NAT 3359_6.2000)
Other resources
- •
- Tax Reform website: http://www.taxreform.ato.gov.au
- •
- Call Centre: 13 72 86
© AUSTRALIAN TAXATION OFFICE FOR THE COMMONWEALTH OF AUSTRALIA
You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).