Fishing Victoria Forum

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...

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

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...

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.

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