Case Study 1: Susan
Susan buys some shares for $6,000.
She owns the shares for 6 months and sells them for $6,600. She has no other capital gains or losses.
Susan declares a capital gain of $600 in her tax return. She will pay tax on this gain at her individual income tax rate.
Case Study 2: Ben
Ben, an Australian resident, buys a block of land. He owns it for 18 months and sells it, making a profit of $10,000. He has no capital losses.
Ben is entitled to the 50% capital gains tax discount for the land. He will declare a capital gain of $5,000 in his tax return.
Case Study 3: Stephen
Stephen bought $2,000 worth of shares (50 shares at $40 per share) in a technology company.
After 18 months he sold the shares. They had fallen in price to $20 per share. He made a capital loss of $1,000.
Stephen also made a profit of $1,500 from selling other shares he held. He had held these shares for five years.
Stephen can deduct the $1,000 he made a loss on from the $1,500 capital gain. This leaves him with a profit of $500. As Stephen held the shares from more than 12-months, he only included half the capital gain in his tax return. He’ll pay tax on this $250 at his marginal tax rate.