Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

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Division 100 - A Guide to capital gains and losses  

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Step 1 - Have you made a capital gain or a capital loss?  

Step 2 - Work out the amount of the capital gain or loss

SECTION 100-40   What factors come into calculating a capital gain or loss?  
Capital proceeds

100-40(1)    
For most CGT events, the capital amounts you receive (or are entitled to receive) from the event are called the capital proceeds .

To work out the capital proceeds: see Division 116 .



Cost base and reduced cost base

100-40(2)    

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For most CGT events, your total costs associated with the event are worked out in 2 different ways:
  • • For the purpose of working out a capital gain , those costs are called the cost base of the CGT asset.
  • • For the purpose of working out a capital loss , those costs are called the reduced cost base of the asset.

    • One of the main differences is that the costs may be indexed for inflation occurring before 1 October 1999 in working out a capital gain for a CGT asset acquired at or before 11.45 am on 21 September 1999 (which reduces the size of the gain), but not in working out a capital loss .

    To work out the cost base and reduced cost base: see Division 110 .

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