Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p29
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 29/34)
Character Range: 1733355–1735850

out a capital gain, those costs are called the cost base of the CGT asset.
• For the purpose of working out a capital loss, those costs are called the reduced cost base of the asset.
  One of the main differences is that the costs may be indexed for inflation occurring before 1 October 1999 in working out a capital gain for a CGT asset acquired at or before 11.45 am on 21 September 1999 (which reduces the size of the gain), but not in working out a capital loss.
To work out the cost base and reduced cost base: see Division 110.

100‑45  How to calculate the capital gain or loss for most CGT events
 1. Work out your capital proceeds from the CGT event.
 2. Work out the cost base for the CGT asset.
 3. Subtract the cost base from the capital proceeds.
 4. If the proceeds exceed the cost base, the difference is your capital gain.
 5. If not, work out the reduced cost base for the asset.
 6. If the reduced cost base exceeds the capital proceeds, the difference is your capital loss.
 7. If the capital proceeds are less than the cost base but more than the reduced cost base, you have neither a capital gain nor a capital loss.

Step 3—Work out your net capital gain or loss for the income year

100‑50  How to work out your net capital gain or loss
 1. Reduce your capital gains for the income year, in the order you choose, by your capital losses for the income year. (If the capital losses for the income year exceed the capital gains, the difference is your net capital loss. You cannot deduct a net capital loss from your assessable income.)
 2. Reduce any remaining capital gains, in the order you choose, by any unapplied net capital losses for previous income years.
 3. Reduce any remaining discount capital gains by the discount percentage.
To find out what is a discount capital gain and the discount percentage:
see Division 115.
 4. If you carry on a small business, apply the small business concessions in further reduction of your capital gains (whether or not the gains are discount capital gains).
For the small business concessions:
see Division 152.
 5. Add up:
 (a) any remaining capital gains that are not discount capital gains; and
 (b) any remaining discount capital gains.
The total is your net capital gain.
 For the rules on working out your net capital gain or loss:
see Division 102.

100‑55  How do you comply with CGT?
  Declare any net capital gain as assessable income in your income tax return.
  Defer any net capital loss to the next income year for