Capital Gains

  1. True or False: A capital loss can be applied to reduce a taxpayer's ordinary income.
    False - a capital loss can only reduce a taxpayer's capital gain. Where capital losses exceed capital gains, the excess is quarantined and carried forward.
  2. True or False: A company whic disposes of a CGT asset is entitleed to the CGT discount.
    False - this is only availabe to individuals, trusts and compying superannuation funds.
  3. True or False: The relevant timing for when a CGT event occurs is generally when a contract is made.
    True – note that when no contract is involved, the CGT event is generally when there is a change in beneficial ownership.
  4. True or False - For an indivudal to acquire an asset, a CGT event does not need to occur
    True – for example, the issue of shares by a company.
  5. True or False - Where an asset is disposed of during thetax year, the capital proceeds only include the sum of any money received and/or the market value of any property received during the year.
    False – s. 116-20 includes amounts to be received in the future.
  6. True or False - The cost base of an asset acuqired would include any liabiltiy assumed on acquisition of the asset where the asset is subject to the liability.
    True – s. 112‑35.
  7. True or False - A discount is availabe to an individual where the asset was acquired before 21 September 1999 and a CGT event occurred during during the 2011 financial year.
    True – note that indexation would also be available to determine a capital gain using the indexed cost base, rather than the discount method.
  8. True or False - Carried forward and current year capital losses must first be offset against capital agins before the gains can be discount.
    True.
Author
PCH
ID
138879
Card Set
Capital Gains
Description
CA Taxation Semester 1 2012
Updated