A WA property investor sells an investment property after holding it for more than 12 months. How is the capital gain treated for federal income tax purposes?
Correct Answer
D) An individual gets the 50% CGT discount, so half the net gain is assessable
Under federal income tax law, individual investors who hold an asset for more than 12 months are entitled to a 50% CGT discount. This means only 50% of the net capital gain is included in the investor's assessable income and taxed at their marginal rate. Companies do not receive this discount.
Why This Is the Correct Answer
An Australian-resident individual who holds an asset for more than 12 months can apply the 50% CGT discount, so only half the net gain is taxed.
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