Below is a summary of my situation:
- Property acquired for CGT purposes on 10/12/2016 (first rented), market value: $410,000
- Sold on 30/06/2025 for $690,000
- Buying/selling costs: $47,000
- Capital proceeds − cost base = $233,000
- Main residence exemption applies for 6 years: 10/12/2016 to 10/12/2022
- After that: 933 days are taxable
- Total ownership period: 3,125 days
- Capital loss carried forward: $70,000
Do I apply option 1 or option 2 in my return?:
OPTION 1:
Calculate total capital gain
➤ $690,000 – ($410,000 + $47,000) = $233,000
Apply capital losses BEFORE the apportioning the gain
➤ $233,000 – $70,000 = $163,000
Apportion the gain for the taxable (non-exempt) period
➤ $163,000 × (933 / 3,125) = $48,665
Apply the 50% CGT discount
➤ $48,665 × 0.5 = $24,333
OPTION 2:
Calculate total capital gain
➤ $690,000 – ($410,000 + $47,000) = $233,000
Apportion the gain for the taxable (non-exempt) period
➤ $233,000 × (933 / 3,125) = $69,564
Apply capital losses BEFORE the CGT discount
➤ $69,564 – $70,000 = $0
Apply the 50% CGT discount (if any remaining gain)
In this case, since the gain is reduced to $0
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