An investor sells a Queensland investment property for a profit after holding it for more than 12 months. For capital gains tax (CGT) purposes, the investor may be entitled to:
Correct Answer
D) A 50% discount on the gain, if the investor is an Australian resident individual
Under federal tax law (which applies in Queensland), individual taxpayers who hold a CGT asset for more than 12 months are entitled to a 50% discount on the capital gain. The discounted gain is then added to the taxpayer's assessable income.
Why This Is the Correct Answer
An Australian resident individual who has held a CGT asset for at least 12 months can reduce the capital gain by 50% after applying any capital losses. The discounted gain is added to assessable income and taxed at the investor's marginal rate.
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