Once you've worked out your capital gain or loss for each CGT asset, you need to work out your net capital gain or net capital loss for the year. This is the amount that goes on your income tax return.
There are rules to ensure you're not taxed twice. For example, if you make a profit on the sale of land and you're required to include it in your assessable income as ordinary income, you donít also include that profit as a capital gain.
Your net capital gain is calculated using the following formula:
A ? B ? C
A is your total capital gains for the year (including those distributed by a managed fund or trust)
B is your total capital losses (including any net capital losses from previous years)
C is any CGT discount and small business CGT concessions you're entitled to
Net capital loss
If your total capital losses for the year exceed your total capital gains, your net capital loss is calculated using the following formula:
A ? B
A is your total capital losses (including any net capital losses from previous years)
B is your total capital gains for the year (including those distributed by a managed fund or trust)
You can't deduct a net capital loss directly from your income, but you can carry it forward and deduct it from capital gains in later income years.
There is no time limit on how long you can carry forward a net capital loss.
You must offset your capital losses against your capital gains in the order in which you made them. You can't choose not to offset capital losses against capital gains if you have them, but you can choose which capital gains to deduct your losses from.
Net losses from collectables can only be deducted from capital gains made from collectables, not from other capital gains.