If you start using part or all of your main residence to produce income for the first time after 20 August 1996, a special rule affects the way you calculate your capital gain or capital loss.
In this case, you are taken to have acquired the dwelling at its market value at the time you first used it to produce income if all of the following apply:
If all of the above apply, you must work out your capital gain or capital loss using the market value of the dwelling at the time you first used it to produce income. You do not have a choice. A similar rule applies if you inherit a dwelling that was the deceased’s main residence and you use it to produce income. If you missed the previous three issues, please click here: Issue 1 , Issue 2, Issue 3 Source: Home first used to produce income
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Continue on the same topic on main residence (see issue 1 and issue 2), do you know that you can have two homes that could be regarded as your main residence and still entitled to the main residence exemption, during a specified period, if certain conditions are satisfied.
If you acquire a new home before you dispose of your existing house, both dwellings may be treated as the your main residence for up to six months only if the following conditions are satisfied:
The exemption for both dwellings only applies for the shorter of six months (ending when the ownership interest in the existing main residence ends) or the period between the acquisition of the new dwelling and the disposal of the old dwelling. Source: Moving into a dwelling Treating a dwelling as your main residence after you move out Selling your home As mentioned in the previous issue , a home is exempt from capital gain tax (CGT) if it is your main residence.
However you main residence are not fully exempted from CGT if you:
Interest deductibility test applies regardless of whether you actually borrowed money to acquire your dwelling. You must apply it on the assumption that you did borrow money to acquire the dwelling. The following are examples where a main residence are partly use to produce income:
Source: Using your home to produce income |
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