Capital Gain against Previous Capital Loss Carried Forward

• 

  songsong on 31/10/2020 - 00:03

  +2

  I'm no expert but maybe net capital gain should be $0 since net takes into account losses (in this case being your loss carried forward), and instead your capital loss carried forward just becomes smaller by the amount of gain you made this year?

  • 

    slick7 on 31/10/2020 - 00:16

    was thinking it could be $0…

• 

  Team Ozgiftcards on 31/10/2020 - 00:07

  +4

  I believe losses are applied before the discount.

  so its gross gain = 6k

  less

  carried forward loss 10k

  equal

  4k carried forward loss to next year.

  in otherwords, your current year CGT is 0.

  • 

    slick7 on 31/10/2020 - 00:20

    Here's the exact help info for each of the 3 fields - I don't know I missed that

    Total current year capital gains —- Add all your capital gains (except disregarded gains). Don't apply losses, discounts or concessions (this makes me think $6k is correct)

    Net capital gain —- From your total current year capital gain, subtract losses and apply discounts and concessions. ($3k seems correct again but I do have the loss of $10k to consider from past year so perhaps net capital gain is $0 and $3k subtracted only in the figure below )

    Net capital loss carried forward to later income years —- Add any net capital loss for the current year plus any unapplied net capital loss from a prior year. (again $7k seem OK)

  • 

    slick7 on 31/10/2020 - 01:29

    thanks Team Ozgiftcards

    you're right about the $4k forward loss unfortunately for me :( it's not $7k loss for future

    seems so unfair holding on to shares for 5+ years in my case - no advantage at all - the $10k loss in the previous year is stuffing me up

    the discount comes last - if you can apply it
    http://classic.austlii.edu.au/au/legis/cth/consol_act/itaa19…

    so in my example:
    Total current year capital gains —- $6000
    Net capital gain —- $0
    Net capital loss carried forward to later income years —- $4000

    • 

      kyle on 31/10/2020 - 04:42

      Can't have your cake and eat it too!

  • 

    avoidfullprice on 31/10/2020 - 01:30

    +1

    What team ozgiftcards said

    Net captial gain = total year gain (6k) subtract losses (10k) = -4k. Then apply concessions and discounts if there is a gain. But no net gain this year so don't apply discount. You carry forward 4k losses.

    This rule is somewhat in place in case someone crystallised say 5k of losses on share, then when the market returns to original purchase value over a year later they declare 5k of gain before "discounts".. but there is actually no captial gain what so ever so no carry over loss of 2.5k in future years

    Source: I tried what OP did once a decade ago and was corrected when I did my return

    • 

      dcep on 31/10/2020 - 02:20

      if only capital loss and no capital gain , do we need to report yet?

      or only report later when there is capital gain and adjust the loss carried forward accordingly ?

      • 

        slick7 on 31/10/2020 - 02:35

        +1

        yes - the CGT event happened for me in a year I only had 1 transaction and it was a loss - it prepopulated net capital loss carried forward to later income years the following year

• 

  AustriaBargain on 31/10/2020 - 02:58

  Are you doing your tax at the last minute?

  • 

    slick7 on 31/10/2020 - 08:06

    yes - last minute because of this CGT issue I've left it to the side and almost forgot about it - good thing though it I'm actually getting something back

• 

  spal on 31/10/2020 - 07:49

  Is there a reporting error in your previous year return? The capital loss is reported as loss from collectibles, which can only be offset against the future gains in the same category. Please check and amend if required. That might fix it.

  • 

    slick7 on 31/10/2020 - 08:09

    all good in previous years - haven't had a CGT loss carried forward before and that was the tricky bit

    the error message mentioning collectibles is what I found most confusing before reading about special rules - in my case CGT is all about buying and sharing shares (no properties or other stuff to consider yet)