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levr
levr, Tax Advisor
Category: Capital Gains and Losses
Satisfied Customers: 29952
Experience:  Working for a large tax preparation service
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What is the rate of capital gains tax, I am considering

Customer Question

What is the rate of capital gains tax
JA: I love the idea of making big money with investments, but there are so many things that could go wrong. The Accountant will be able to help you. Please tell me more, so we can help you best.
Customer: I am considering selling my share of a small business back to the business and retiring (I am 67). I have already had an estimate of how much tax I would have to pay if my share of the company was $400,000 but I would like to know how much this would increase or decrease if the amount is different from $400,000.
JA: When we are ready I'll take you to the appropriate web page.
Customer: okay
JA: Is there anything else important you think the Accountant should know?
Customer: No
Submitted: 1 month ago.
Category: Capital Gains and Losses
Expert:  levr replied 1 month ago.

Can you confirm your location?

Are you in the US or in Australia?

Customer: replied 1 month ago.
Australia
Expert:  levr replied 1 month ago.

If you sell a capital asset, such as real estate or shares, you usually make a capital gain or capital loss. This is the difference between what it cost you to acquire the asset and what you receive when you dispose of it.
Although it's referred to as capital gains tax (CGT), this is actually part of your income tax, not a separate tax.

Expert:  levr replied 1 month ago.

If you sell or dispose of your capital gains tax assets in less than 12 months you’ll pay the full capital gain. But, you could get a 50% discount on your capital gain for any capital gains tax asset held for over 12 months before you sell it.
The point at which you make a capital gain or loss is usually when you enter into the contract for disposal, not when you settle. So if you sign a contract to sell an investment property in June 2017, and settle in August 2017, you need to report the capital gain or loss in your 2016–17 tax return.
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In additional - we need to consider tax rates.
Taxable income 0 – $18,200 - Nil
$18,201 – $37,000 Tax on this income 19c for each $1 over $18,200
$37,001 – $87,000 - Tax on this income $3,572 plus 32.5c for each $1 over $37,000
$87,001 – $180,000 - Tax on this income $19,822 plus 37c for each $1 over $87,000
$180,001 and over Tax on this income - $54,232 plus 45c for each $1 over $180,000
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So - assuming your capital gains is $400,000 and all amount qualifies for 50% discount,
then your estimated tax liability could be ~$63,232

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