Patricia is 52 years old and she has owned and operated a small cafe bar for the last 6 years. She made a capital gain from selling this business of$600?000the 2019-20 tax year. Patricia also has a carry forward capital loss of $10,000. Assume that Patricia's business meets the basic conditions in Division 152 ITAA97 and so she qualifies for the CGT small business concessions. What is Patricia's net capital gain likely to be for 2020?

Question

Quizplus · Accepted Answer

Patricia's net capital gain is likely to be $145,000 before the lifetime retirement exemption and/or small business rollover are applied because the CGT small business concessions can reduce the capital gain significantly. After applying the 50% active asset reduction, her gain would be reduced to $300,000. Then, by applying the 50% general discount for individuals, it further reduces to $145,000. The carry forward capital loss of $10,000 can be applied before these concessions.

Patricia Is 52 Years Old and She Has Owned and Operated