Capital gains simplified

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blacklab99
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Re: Capital gains simplified

Postby blacklab99 » Wed Jun 13, 2018 8:15 pm

Smile,
Both you and your wife need to see an accountant to handle all your yearly tax returns, that's the best piece of advice I can give to you.
If you have a mortgage, the interest payments become tax deductible, negative gearing.
Above that, is profit, as mentioned, you should split that income to alieviate bracket creep.
Then on the sale, capital gains kicks in, on purchase price, vrs costs to you for maintenance and up keep, the the remaining is taxed as profit.

THEN, there's land tax, there's no hiding from that either, again, on a sliding scale depending on value

As mentioned, the best thing you can do, is get an accountant ! No of far to many people that have been caught out thru ignorance, and the tax man
cares not who you are, they will find out and pursue you.

Col



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smile0784
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Re: Capital gains simplified

Postby smile0784 » Wed Jun 13, 2018 8:37 pm

skouta wrote:This is not financial advice...

I am going through a Capital Gains event now.

In your example if it is an Investment Property.

Bought for $245K
Sold for $400K
Capital Gain = $155K

Less 50% Discount if held property for over 1 year = $77.5K

Less, Insurance, Interest, Rates, Maintenance, Repairs, legal costs and possibly more.

Let's say this dropped it down to $50K after you remove all of the above deductible expenses.

If the property is in one name then the $50K would be declared income and added to your income tax, if 2 names the $50K would be split to $25K extra each declared in your incomes.. So if it was only in one name and you were earning and paying tax normally on $100K you would add the $50K for this tax year and would therefore be earning $150K and paying income tax on the full $150K.

So you keep some of the sale money aside as it can be next year you will be doing your tax.

I'm not an accountant but this is what my accountant has told me as we are going through this at the moment. Speak to your accountant this is nothing new for them...


Thanks that explains it alot clearer

smile0784
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Re: Capital gains simplified

Postby smile0784 » Wed Jun 13, 2018 8:40 pm

blacklab99 wrote:Smile,
Both you and your wife need to see an accountant to handle all your yearly tax returns, that's the best piece of advice I can give to you.
If you have a mortgage, the interest payments become tax deductible, negative gearing.
Above that, is profit, as mentioned, you should split that income to alieviate bracket creep.
Then on the sale, capital gains kicks in, on purchase price, vrs costs to you for maintenance and up keep, the the remaining is taxed as profit.

THEN, there's land tax, there's no hiding from that either, again, on a sliding scale depending on value

As mentioned, the best thing you can do, is get an accountant ! No of far to many people that have been caught out thru ignorance, and the tax man
cares not who you are, they will find out and pursue you.

Col


Will do thanks

Lightningx
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Re: Capital gains simplified

Postby Lightningx » Wed Jun 13, 2018 8:44 pm

skouta wrote:This is not financial advice...

I am going through a Capital Gains event now.

In your example if it is an Investment Property.

Bought for $245K
Sold for $400K
Capital Gain = $155K

Less 50% Discount if held property for over 1 year = $77.5K

Less, Insurance, Interest, Rates, Maintenance, Repairs, legal costs and possibly more.

Let's say this dropped it down to $50K after you remove all of the above deductible expenses.

If the property is in one name then the $50K would be declared income and added to your income tax, if 2 names the $50K would be split to $25K extra each declared in your incomes.. So if it was only in one name and you were earning and paying tax normally on $100K you would add the $50K for this tax year and would therefore be earning $150K and paying income tax on the full $150K.

So you keep some of the sale money aside as it can be next year you will be doing your tax.

I'm not an accountant but this is what my accountant has told me as we are going through this at the moment. Speak to your accountant this is nothing new for them...

That’s well explained and easy to comprehend.
Cheers :thumbsup:

blacklab99
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Re: Capital gains simplified

Postby blacklab99 » Wed Jun 13, 2018 8:45 pm

Good man,
You'll appreciate it down the track.....

Col

smile0784
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Re: Capital gains simplified

Postby smile0784 » Wed Jun 13, 2018 9:06 pm

It was.just to get.peoples idea and to think of things i havent think of.
Everything needs to be confirmed with accountant and my financial planner.
I just like to get most of my egg strait so i can work what i wamt to do before i tslk to anyone officially



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frozenpod
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Re: Capital gains simplified

Postby frozenpod » Wed Jun 13, 2018 9:38 pm

Yep go and see an account. I would also suggest going to see a financial adviser.

Pick one that is independent charges by the hour and doesn't receive kick backs.

blacklab99
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Re: Capital gains simplified

Postby blacklab99 » Wed Jun 13, 2018 9:51 pm

frozenpod wrote:Yep go and see an account. I would also suggest going to see a financial adviser.

Pick one that is independent charges by the hour and doesn't receive kick backs.



Let me know if you can find one like that !
Mine charges in increments of 30 seconds, by the size of his invoice
Don't know about kick backs, but my last accountant tried to access loan funds that were for an off the plan factory i was purchasing,
He sure got a kick back when I caught him...........

Col

smile0784
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Re: Capital gains simplified

Postby smile0784 » Fri Jun 15, 2018 10:22 pm

skouta wrote:This is not financial advice...

I am going through a Capital Gains event now.

In your example if it is an Investment Property.

Bought for $245K
Sold for $400K
Capital Gain = $155K

Less 50% Discount if held property for over 1 year = $77.5K

Less, Insurance, Interest, Rates, Maintenance, Repairs, legal costs and possibly more.

Let's say this dropped it down to $50K after you remove all of the above deductible expenses.

If the property is in one name then the $50K would be declared income and added to your income tax, if 2 names the $50K would be split to $25K extra each declared in your incomes.. So if it was only in one name and you were earning and paying tax normally on $100K you would add the $50K for this tax year and would therefore be earning $150K and paying income tax on the full $150K.

So you keep some of the sale money aside as it can be next year you will be doing your tax.

I'm not an accountant but this is what my accountant has told me as we are going through this at the moment. Speak to your accountant this is nothing new for them...


Just to clarify
You say i can claim interest
So roughly $1000 interest per month x 8 years =96k but rent covered that
Or do you mean interest over the mortgage income? Or only Like when house in empty about 9k
Rates over 8 years roughly 11k
Insurance 5k
Maintenance over 8 years 20k
Samp duty and conveyancing when buying 12k
Selling cost 7 or 8k maybe lol

Thats about 63k with out interest of possible 9k
And sure theres more

Is that correctish?
What happens when CG looses excees CG tax?
I presume i wouldnt pay any taxes

smile0784
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Re: Capital gains simplified

Postby smile0784 » Fri Jun 15, 2018 10:51 pm

blacklab99 wrote:
frozenpod wrote:Yep go and see an account. I would also suggest going to see a financial adviser.

Pick one that is independent charges by the hour and doesn't receive kick backs.



Let me know if you can find one like that !
Mine charges in increments of 30 seconds, by the size of his invoice
Don't know about kick backs, but my last accountant tried to access loan funds that were for an off the plan factory i was purchasing,
He sure got a kick back when I caught him...........

Col

My financial advisor works out of the same office block as my account and seen him few times now and he hasnt billed me.



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