Preamble

Please keep your question specific to one particular issue. Questions regarding your overall circumstances are beyond the scope of this service as they will require much more correspondence and are best answered by your Accountant. Alternatively, if you have a more detailed question you would like answered please contact us and we will give you an estimate of the cost and further information required.

For example, a suitable simple direct question – Can I claim interest as a tax deduction while my rental property is being constructed?

A not suitable overview question – What sort of structure should I use to purchase my rental property?

We currently offer two services to answer your tax question. Our Ask a Basic Question, is best suited for question that concern a single part of the law and costs $79.95.

If your tax question has multiple parts, your question will be best answered by our Ask a Complex Question service which costs $165.00.

We’ve included examples of these questions below to help you identify if your question is basic or complex.

Example of a Basic Question

Classic CGT When Couple Both have a Main Residence

I am currently living/retired in Thailand and am considered a Non Resident for Taxation purposes.

My mother purchased an apartment in May 2013. She passed away in Feb 2017. The apartment was left to me in the Will and the transfer to my name was completed in Oct 2017.

I lived in the apartment until I moved to Thailand in April 2018 and the apartment was rented out in Dec 2018

I am planing on selling the apartment in the next 2 years and at this time I would think it will be sold at a loss on the purchase price.

So what date will the ATO take in to consideration when calculating the capital loss and can this loss be added to already obtained capital losses for previous share sales. Also is there anything else I should consider about selling the apartment that might lead to other complications

Thank you

Example of a Complex Question

Classic CGT When Couple Both have a Main Residence

Selling second home options Capital Gain Questions for my farm in VIC:

  • Purchased: April 1996. $46,000.00
  • Valuation: Nov 2021 $550,000.00
  • Aim: To minimise/eliminate my capital gain event on this property?

Background

  • We are a same-sex couple (married in 2019) who live in our own home in Melbourne. Our current PPR.
  • The Melbourne house was purchased in 2002 and is in my husband’s name; we both moved in to this residence at this time.
  • The Farm was purchased in 1996, in my name and is located in quiet, rural primary producing area. I lived there until 2002, it has been used as a second home since then. During this time a lot of renovation and maintenance work has been carried out on the property.
  • The Farm has never been rented out and has always had my personal effects there. It is used regularly (fortnightly) as a second home. Currently my car and licence are registered at this address (this helped during COVID ).
  • All of my other correspondence is sent to the Melbourne home (PPR).
  • We are thinking of selling some time in the next few years in order to move closer to family in northern NSW.
  • We have kept very detailed records using the Destiny Track program and have retained the receipts for holding expenses, maintenance and renovation costs incurred for The Farm as well as detailed records for the Melbourne house.
  • We have some questions regarding the future sales of these properties in relation to minimising capital gains tax.

Our Current Options

  • Option 1. We sell Jason’s Melbourne house and move into the Farm.
    Once we move into this property how long do we have to reside there to be able to claim it as our PPR? Does this eliminate triggering a capital gain event?
    We would then sell the farm and use all the proceeds to purchase another house elsewhere, probably in NSW.
  • Option 2. We stay in Jason’s Melbourne house and rent out the Farm.
    How long does the Farm need to be rented out to trigger a reset of the cost base? Am I right in thinking this will reduce the capital gain significantly?
    We would then sell Jason’s house and the Farm and use all of the proceeds to purchase another house elsewhere, probably in NSW.
  • Option 3. We sell the Farm pay the CGT, then sell Melbourne (no CGT) and buy the NSW property.

I have purchased Ban tax’s CGT calculator and have run a number of scenarios. I know that I can adjust the cost base by the amounts it has cost me to hold/maintain/renovate the property over all these years.
I am unsure if the 6 year rule applies here regarding moving in with my husband in 2002?
Do I use 2008 in my calculations?

Hopefully with whichever option we chose there would be some funds left over to divert to our superannuation.


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